Cartoon Kulturkampf

8 May 2003

Haim Saban wants to avoid buying out minorities in broadcaster ProSieben when he buys Kirch Media’s assets. They are threatening to sue. In a Germany that needs foreign investors, the regulator should back the minority investors.

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Media mogul Haim Saban is running into trouble over his acquisition of the assets of Kirch Media. Shareholders in ProSieben are taking legal steps to force Saban to make an offer to them for their shares, after they became aware that he is seeking an exemption from the mandatory offer normally required under German law. Meanwhile, Kirch's creditor banks have obliged Saban to retreat from an attempt to modify the terms on which he is to pay them for Kirch's other major asset, its rights library.

Saban, the US/Israeli billionaire former owner of Fox Family worldwide, reached a preliminary agreement in March to buy Kirch Media's main assets, a majority in broadcaster ProSieben and a film and TV rights library, for about E2bn. Kirch Media is being sold at the behest of its creditor banks, BayernLB, Commerzbank, HVB and DZ Bank, who had between them lent over E1.3bn to the insolvent company. Saban's bid was made in partnership with private equity funds and French broadcaster TF1. The price tag did not include the cost of a planned E300m recapitalisation of ProSieben, or of a possible offer to its 36.25% minority shareholders.

Following reports that Saban has asked the German market regulator, BaFin, for an exemption from the normal obligation to make a mandatory offer to minority shareholders in a takeover, K Capital, a Bostonbased fund, has announced that it will take legal action to force such an offer.

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