Bertelsmann gains stake in RTL

Bertelsmann could float in three years

Bertelsmann has swapped 25% of its own shares in a deal to acquire a 30% stake in the European broadcaster RTL.

In giving up a quarter of its shares, Bertelsmann has also opened the way to a possible stock market listing.

The German media giant has exchanged its shares with the Belgian investment company, Groupe Bruxelles Lambert (GBL), which held the 30% stake in RTL.

As the new owner of Bertelsmann stock, GBL has the option to sell its 25% stake via a stock market listing in three years time.

A possible Bertelsmann float

GBL is billing the move as an intermediate step to taking part of Bertelsmann public.

"For a company like Bertelsmann, which has a very specific culture and has been family-controlled for a long time, it's a big step to go to the market straight," said Thierry de Rudder, managing director of GBL.

Thomas Middelhoff: Bertelsmann's unique corporate culture will remain in tact even if there is a float

Bertelsmann's chief executive, Thomas Middelhoff, said the deal would have little impact on the company's strategy.

"Bertelsmann's unique corporate culture will remain in tact even in the event of a possible [flotation] in about three years from now," he noted.

GBL will not have any voting rights.

Analysts appeared to approve the deal, in a media sector that currently has limited access to the equity markets.

Acquisition currency for RTL

With the new deal, Bertelsmann now owns 67% of the RTL Group.

The RTL Group was created in April 2000 through the merger of Pearson TV and CLT-UFA.

RTL's shares are closely held, with Pearson owning 22% and 11% in free-float.

RTL shareholders

Bertelsmann: 67%

Pearson: 22%

Free-float: 11%

In a written statement, Bertelsmann said, "All parties involved agree that Bertelsmann has found a ground-breaking new way to adjust to changing conditions and to use its own shares as acquisition currency, while still retaining its entrepreneurial independence."

The financial terms of the deal were not disclosed, but analysts estimate that the deal implied a significant premium to the RTL stake.

RTL's shares rose 7.53% to 100 euros, while GBL shares were 9.94% higher at 271 euros at around 1520 GMT.

RTL operates 22 television stations and 18 radio stations in 11 countries. It also produces films and is a sports-rights marketer.

Bertelsmann has media interests on both sides of the Atlantic, including music company BMG Entertainment and and control of the book publisher Random House.

The German media group is negotiating a possible merger between BMG and music rival EMI Group. Bertelsmann said a flotation would have little impact on those talks.