Business News
Axel Springer enters into agreement with Dogan Group
Monday 23. November 2009 - Acquisition of 29 percent in Dogan Yayin Holding A.S., when tax and regulatory proceedings will be resolved successfully
Axel Springer and the Turkish Dogan Group entered into an agreement regarding their future cooperation.
Provided, the tax proceedings and the regulatory proceedings brought against Dogan TV Holding A.S. (DTV) by the Radio and Television Supreme Council RTÜK will be resolved successfully, Axel Springer and Dogan Media Holding (Dogan Yayin Holding A.S., DYH) continue to strengthen their strategic partnership.
At first, Dogan Sirketler Grubu Holding A.S. (Dogan Holding, DH) will implement a capital increase at DYH of TRY 198 million. Afterwards, Axel Springer will acquire from DH a 29 percent stake in the increased capital at a purchase price of approximately TRY 356.7 million (currently approximately EUR 161 million), subject to adjustment based on the DYH stock performance in the last three months prior to March 31, 2016. The final purchase price so determined will be payable in 2016. Any claims Axel Springer may have against DH or DYH, in particular arising from the existing value adjustment mechanism with DTV, can be set off against the purchase price.
DHYs Board of Directors will consist of 10 (DH 5, Axel Springer 3, others 2) members. Decisions of the Board of Directors require a majority of 8 votes. An Executive Committee (management board of holding) is responsible for business operations. This Committee consists of 5 members. Axel Springer has the right to propose one member. Decisions cannot be taken against the vote of this member.
Even if the transaction does not proceed to closing, new provisions between Axel Springer and Dogan will come into effect, improving the guarantees and protection mechanisms with respect to the Axel Springer shares in Dogan TV significantly.
Also, DYH will implement a capital increase in the amount of EUR 385 million at DTV which will significantly reduce the companys debt and dilute Axel Springers current 25 percent stake to 19.9 percent. In addition, the parties agreed on a prolongation of the value adjustment mechanism for DTV until 2016.
The agreement on the acquisition of 29 percent in DYH replaces the agreement about the acquisition of an approx. 9.1 percent stake in DYH by Axel Springer which had been concluded in November 2008 and had not been closed yet.
DYH, which is listed on the Istanbul Stock Exchange, is one of the leading Turkish newspaper and magazine publishers and has major activities in the television and radio broadcasting, digital media, book publishing as well as printing and distribution markets. DH has recently announced to invite a strategic partner to participate in DYH.
The transaction is subject to approval by the competent media and antitrust authorities.