News & Analysis

Late Apax offer fails to win Kirch day

The creditors of insolvent German media group KirchMedia have accepted Haim Saban’s E525m offer for the group’s ProSieben TV unit.

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A group of German banking groups controlling insolvent German media concern Kirch Media have accepted a revised E525m, or E7.25 per share, offer for Kirch’s ProSieben TV from US billionaire investor Haim Saban and a consortium of five US private equity firms.

 

A late rival bid from Apax Partners failed to prevent Saban and the banks from reaching agreement.

 

The UK private equity firm, which has an office in Munich, had emerged earlier today with a last-minute offer for the German broadcaster, offering E8.00 per share for the business. However, the group’s creditors, including Commerzbank, HypoVereinsbank Group, DZ Bank and BayernLB, unanimously approved Saban’s offer.

 

Apax declined to disclose details of its offer.

 

In June, Saban had submitted an initial E2bn offer for the business, which at the time also included the group’s film archive. The ultimately unsuccessful bid was made without the backing of private equity firms.

 

The revised E525m offer, which excludes the film assets and its E1.3bn of debt, is supported by US private equity groups Bain Capital, Hellman & Friedman, Providence Equity Partners, Quadrangle Group and Thomas H Lee Partners.

 

Rothschild is advising the consortium on its offer for ProSieben. Saban is being advised by JP Morgan. KirchMedia is being advised by UBS Warburg.

  

The creditors of KirchMedia have been trying to sell KirchMedia's key assets for more than a year to recover some of the billions of euros borrowed by Leo Kirch, who ran the KirchMedia empire until its collapse last year.

 

Initially, Saban and the US consortium are to pay just over E525m for 36 per cent of ProSieben’s share capital. The stake would comprise ordinary shares and would represent 72 per cent of the broadcaster's voting rights, giving the consortium effective control of the company.

 

In a second stage, the consortium would pay E200m for an additional 14.5 per cent stake in ProSieben currently held by KirchMedia subsidiary Taurus TV. An additional E280m to E300m will be invested into the business by way of a capital increase.