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Friday, 16 February, 2001, 22:24 GMT
EM.TV rescue deal wobbles
F1 cars
EM.TV owns 50% of Formula One racing
The future of a rescue deal for German media group EM.TV looked beset by difficulties on Friday.

In another setback, the company reported that the chairman of its supervisory board, Nickolaus Becker, has resigned over the deal, according to the newswire AP.

Only on Wednesday, it looked like the future of EM.TV was finally secured through the signing of a rescue package with the Kirch group.

But early on Friday reports surfaced that the buy-out may be opposed by the family which controls the rights to Formula One.

Access to Formula One racing is said to be a key factor driving Kirch's motivation to buy EM.TV.

Although the details surrounding Mr Becker's resignation were unclear, his departure is bound to be one more blow for the company.

Earlier this month, Mr Becker, head of the company's board since 1997, reportedly clashed with Kirch deputy chief executive Dieter Hahn over the terms of the Kirch bid.

Under the agreement between EM.TV and Kirch, the latter would buy half of EM.TV's 50% stake in Formula One, and finance an option for EM.TV to buy another 25% for $1bn.

If reports prove true of objections by the Ecclestone family trust, which controls commercial rights to Formula One, the whole deal could yet be called off.

Haggling

Kirch has confirmed that it wants to buy a 16.74% stake in debt-laden EM.TV.

EM.TV, which distributes films and owns the rights to the Muppets, ran into trouble when a series of acquisitions left it over-burdened with debt.

Kermit
Kermit is looking worried
Mr Becker was allegedly pushing for a better price than Kirch has offered for the Formula One stake.

And rumours that the deal would fall through, sent EM.TV's stock price plunging to new depths.

The shares dropped 6.3% to 7.18 euros in Frankfurt trading on Friday.

Last year EM.TV grabbed headlines by buying the Jim Henson Company, maker of the Muppets, for $860m.

It also paid $1.65bn in cash and shares for its 50% share in the Formula One holding company.

Insider-trading probe

A December profit warning by EM.TV triggered a rout in the Neuer Market and fuelled a crisis in investor confidence in the technology-rich index.

To add to the company's troubles, regulators have begun a formal insider-trading investigation.

The Munich public prosecutor is also conducting a separate probe into share dealings by EM.TV top managers including Mr Haffa and his brother Florian, the group's former chief financial officer.

And the company faces a slew of lawsuits from shareholders who accuse management of concealing its financial woes.

EM.TV has insisted that it always acted in good faith and on best information.

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See also:

04 Dec 00 | Business
Joint F1 owner struggles
22 Mar 00 | Business
Muppet owners buy Formula One
06 Dec 99 | Business
Murdoch's German breakthrough
05 Jan 01 | Business
EM.TV rescue doubts grow
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