KKR offers 63 euros per share to buy out Axel Springer minorities
FRANKFURT (Reuters) – Funds controlled by U.S. private equity investor KKR on Wednesday offered 63 euros a share to buy out minority shareholders in Axel Springer in a deal agreed with the German publisher’s main shareholders.
The takeover offer, at a 40% premium, will be subject to reaching a minimum acceptance threshold of 20% of Springer’s share capital, the bid vehicle acting on behalf of KKR said in a statement.
The offer is being launched in concert with the company’s main shareholders, founder Axel Springer’s widow Friede and CEO Mathias Doepfner, who want to take the company private so that they can invest in long-term growth.
Springer shares jumped by 12% in pre-market trade at broker Lang & Schwarz to trade at 62.88 euros. Stock had rallied by 20% last week on news of the plan to take the company private before steadying to close at 56 euros on Tuesday.
Investors had punished Springer shares over the past 12 months on perceptions that the company was overcommitted to its legacy media titles and doing too little to realize value from its more dynamic digital classifieds properties.
Like many legacy media companies, Springer faces pressure from digital platforms led by Google that are squeezing in advertising. Its jobs portal – Stepstone – has complained to Brussels about the Google’s recent launch of a jobs product in Germany that grabbed an overnight market lead.
Additionally, Springer issued a profit warning, saying it saw a drop in revenue in the low single-digit percentage range. Its adjusted earnings before interest, taxation, depreciation and amortization (EBITDA) faces a mid-single-digit drop.
Looking ahead to 2020, the German publisher said its investment plans meant that adjusted EBITDA would be “significantly below” the current year’s outturn, before an improvement expected in the ensuing years.
Reporting by Douglas Busvine, Editing by Thomas Seythal and Sherry Jacob-Phillips