German media giant, the privately-owned Kirch Group, has agreed to acquire a minority blocking stake in troubled EM.TV & Merchandising. Kirch is also to cut a slice of EM.TV’s 50% holding in Formula One.
The all stock deal was sealed on Sunday, with Kirch taking marginally over 25% of EM.TV, thereby easing some of the company’s acute financial problems. In return, Kirch gains immediate access to EM.TV’s profitable portfolio of children’s TV content – including Sesame Street and The Muppet Show. Longer term, Kirch gets a foot in the lucrative door of Formula One motor racing
The intervention of Kirch is likely to restore investors’ confidence in the ailing former high-flier, which this weekend warned that full-year EBITDA (earnings before interest, taxes and amortization) will be 90% below previous forecasts.
EM.TV founder Thomas Haffa and Dieter Hahn, deputy chief executive of the Kirch Group, have called a news conference today in Munich at which details of the deal will be presented.
News source: Wall Street Journal