Kirch empire nears break-up

Leo Kirch has described Mr Murdoch as 'a shark' in the past

Germany's troubled Kirch Gruppe is close to sealing a deal that could see shareholders Rupert Murdoch, Silvio Berlusconi, and Lehman Brothers take control of KirchMedia - the group's core free-to-air television and rights arm.

The investors have reportedly offered to inject about 800m euros into KirchMedia in return for control of the company.

The deal would dilute founder Leo Kirch's 72% stake to less than 50%.

Those behind the rescue package - which include Rupert Murdoch's News Corp and Silvio Berlusconi's family-run media groups - are pressing for a decision by the end of the week.

A deal would lead to a major shake-up of German broadcasting as the country's biggest television broadcaster ProSiebenSAT.1, which is 52% owned by KirchMedia, would come under foreign ownership.

End of the empire

Kirch, one of Germany's best-known media groups with interests spanning television to publishing, has been negotiating a bail-out with creditors for weeks.

Mr Murdoch's News Corp and Mr Berlusconi's Mediaset - who have both declined to comment on the talks - along with Fininvest, Lehman Brothers and Saudi Arabia's Prince Alwaleed Bin Talal together control 12.2% of KirchMedia.

Bayerische Landesbank, Commerzbank, DZ-Bank and Hypo-Vereinsbank are also involved after lending Kirch 3bn euros.

Kirch had amassed a 6.5bn euro debt pile from an acquisition spree and from its pay television operations.