cash out

Bertelsmann reverses course and plans to offload shares of RTL Group

January 31, 2013
January 31, 2013

Bertelsmann, Europe’s largest media company, announced today it is considering to sell shares of RTL Group, an entertainment company and division of Bertelsmann. Currently, Bertelsmann holds 92.3% of the voting rights, and plans to reduce them to about 75%.

Bertelsmann plans a global expansion and needs funds to pay for it; the company wants to focus more on emerging markets, such as China. Thursday’s closing RTL Group share price was €75.5 ($102); the 17.3% stake is valued at a around €2 billion ($2.7 billion).

The move comes as a surprise after year-long talks to completely take over RTL Group which has brought in 38.2% of the company’s 2011 revenue. Now the company is reversing strategy. CEO Thomas Rabe said today:

The possible sale of RTL Group shares would be one element in financing the long-term corporate strategy, with its four key strategic objectives: strengthening the core business, digital transformation, establishment and expansion of growth platforms, and regional growth in emerging markets. The goal is to make Bertelsmann a faster growing, more digital and more international company in the years ahead.

The company’s supervisory board has “in principle” approved the plan and authorized the executive board to consider “respective measures and initiate them “under certain conditions.”

Meanwhile, RTL Group considers to pay an extraordinary dividend to its shareholders. RTL is Europe’s largest television and radio group with 54 TV and 29 radio channels in 10 countries.

Bertelsmann also announced preliminary and unaudited figures with a €16 billion ($21.6 billion) revenue for the 2012 fiscal year, up from €15.4 billion ($20.8 billion) in 2011. Revenues had been going down since 2007 ($25.4 billion), while the company added value and reduced its debt. EBIT was at €1.7 billion, which matched the previous year’s level. Bertelsmann has four divisions: RTL Group, Arvato, Gruner + Jahr and Random House.

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