Bertelsmann's new chairman/chief executive Gunter Theilen, who replaced ceo Thomas Middelhoff in a boardroom putsch last weekend, has written to the media giant’s employees telling them the group is still proceeding with plans for an initial public offering, possibly in 2005.

Displaying an understandable caution, Thielen referred to the flotation only as a possibility rather than a certainty. It is believed the difference between these two adjectives along with the structure of the offering, triggered the row that led to Middelhoff’s ousting.

The IPO – if it goes ahead – would transform the privately held group, headquartered in Gütersloh, a small provincial town in north-west Germany. Currently a heterogeneous collection of businesses, each with a degree of freedom unusual in a multinational giant, public ownership would compel Bertelsmann to metamorphose into a conventional centralized media conglomerate.

Such a structure would clash with the well known and long-held philosophy of the group’s major shareholder Reinhard Mohn.

But the real plutonium in last weekend’s chain reaction was the structure of the IPO, Middelhoff demanding that it include a substantial part of the 75% stake in the group owned by the Mohn family controlled Bertelsmann Foundation .

As Thielen put it with admirable pithiness in an interview Wednesday with Deutsche Presse Agentur: “Thomas Middelhoff thought the shares held by the Bertelsmann Foundation should take part in the IPO, if there were to be one. The shareholders disagreed.”

Thielen’s letter also warns staff that Bertelsmann, like most of its media rivals, is no longer as well-heeled as it once was. The group traditionally operated with little or no debt – a situation now sharply reversed, thanks largely to Middelhoff’s substantial internet and other investments such as the purchase of Napster which are said to have dissipated funds of more than $8 billion, mostly accrued from the sale of the group’s stake in America Online.

This, together with a previous contractual obligation to buy the music company Zomba Records at a price set by a predetermined formula, likely to be an eye-watering $3 billion, has pushed Bertelsmann beyond its “self-imposed debt limit.”

Although Thielsen aims to embark on a rigorous debt-reduction program, he aims to continue overseas expansions, especially in the USA.

Data sourced from: New York Times; additional content by WARC staff