Kirch Emerges from Ruins to Pursue Springer Feud

28 June 2002

As former US secretary of state Dean Acheson observed four decades back: “Great Britain has lost an empire and not yet found a role.”

But no-one could level a similar charge at quondam German media mogul Leo Kirch who having mislaid his domain only last month immediately cast himself in the role of avenger-in-chief on Axel Springer .

The catalyst that triggered the 75-year-old tycoon’s latest bout of enmity is the €767 million ($753.7m; £495.66m) put option activated by Springer that allegedly hammered the final nail into the coffin of the KirchMedia empire.

Leo’s proxy army accordingly invaded the Axel Springer annual general meeting on Wednesday to claim that Springer – Europe’s largest newspaper publisher – had “massively violated share law and decency” when exercising its put option for a stake in Kirch-controlled pay-TV operation ProSiebenSat.1.

Accused Kirch legal mouthpiece Ronald Frohne: “The board acted in the interest of the main shareholder Friede Springer, but not in the interest of the company and other shareholders. The aim of this decision was to get rid of Leo Kirch, an unwelcome minority shareholder.” Frohne then served shareholders with a motion to sue the Springer board for damages.

Glaring from the sidelines was Kirch himself, although he uttered not a single word despite his 40% stake in the company [currently up for disposal by Kirch’s administrators]. Mathias Döpfner, Springer's ceo, was not similarly silent. “Axel Springer had no interest in weakening Kirch,” he insisted. “We failed to find an alternative solution after lengthy discussions. We had to exercise the put option.”

Added the head of Springer’s supervisory board, Bernhard Servatius: “The alternatives to exercising the put option were either legally not feasible or not safe in the case of insolvency.”

The Kirch-Springer take on the Hatfields and McCoys has its roots back in the 1980s when Leo Kirch tried to challenge the Springer heirs for control of their dynastic fiefdom.

Data sourced from: Financial Times; additional content by WARC staff