Screening for profits

17 April 2013 By Olaf Storbeck

Bertelsmann is reducing its exposure to TV by selling a chunk of RTL. The German broadcaster seems well-placed to deal with the status quo, but the longer term prospects are less clear. Internet distribution channels present free-to-air terrestrial TV huge headaches.

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Bertelsmann, Europe’s largest media company, set the price range for its secondary public offering of a 16.5 percent stake in RTL Group on April 17.
It is planning to sell 25.5 million shares of the television network at between 54 and 62 euros. Currently, about 8 percent of RTL shares are being traded in Luxembourg at a price of 57.70 euros. The sale will increase RTL’s free float to about 24 percent of the total and cut Bertelsmann’s stake to about 76 percent from 92.3 percent. Bertelsmann hopes to raise between 1.4 and 1.6 billion euros through the sale, capital it says it will use to fund expansion in its other businesses.
Since Bertelsmann indicated its intention to sell a minority stake in RTL in January, RTL shares have lost more than 22 percent.
The offering period is scheduled to start on April 18 and end on April 29.

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