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Axel Springer agrees to acquire 25% stake in Polsat

Axel Springer agreed to buy a quarter of Poland's Polsat for €250 million ($332.7 million), the second purchase of a television broadcaster by the German company in the past month.

The company will buy a 25.1% stake in Warsaw-based Polsat SA from founder Zygmunt Solorz-Zak, Axel Springer AG, Europe's biggest newspaper publisher, said in an e-mail statement. Solorz-Zak plans to sell 15% of Polsat on the stock exchange by the end of 2008, he said in an interview. Springer has moved to TV markets outside its home market after regulators rejected its plan earlier this year to buy Germany's biggest private broadcaster ProSiebenSat.1 Media AG for €4.2 billion.
The publisher last month agreed to buy 25% of Turkey's largest broadcaster for €375 million. Shares of Berlin-based Axel Springer rose €6.42, or 5.4%, to €125 in Frankfurt, valuing the company at €4.3 billion. Springer also said yesterday that private-equity firm Hellman & Friedman LLC is offering to sell as many as 3.6 million Springer shares for between €120 and €135 each.

Axel Springer may pay as much as €50 million additionally for the Polsat stake depending on the „future” value of the holding, according to today's statement. Polsat operates five television channels in Poland, including two sports channels and one channel covering health and beauty issues. Solorz-Zak founded the broadcaster with money earned from the sale of used cars and sewing machines. „I decided to sell,” Solorz-Zak said in the interview from Warsaw yesterday. „We will now improve our position on the market gradually, we will rebuild it.”

Springer's own Fakt tabloid became Poland's most-read newspaper two months after its 2003 debut and has a daily circulation of about 520,000 copies. Springer introduced another Polish newspaper, called Dziennik, in April. „It's clearly our intention to keep the Polsat stake as a long-term investment,” Springer spokeswoman Edda Fels said by telephone today. Solorz-Zak and the companies he controls had almost 100% of Polsat before the sale, Polsat spokeswoman Katarzyna Wyszomirska said.

With ProSiebenSat.1, Springer had planned to create a second German media company with print and TV operations to challenge Bertelsmann AG in Germany's €20 billion advertising market. Springer, named after its founder and controlled by the Springer family, publishes the Bild newspaper, Germany's biggest-selling tabloid that draws more than 12 million readers every day. Springer agreed to buy a quarter of the television business of Turkey's Dogan Yayin Holding AS on November 16. Within a week of that announcement, Dogan said it plans to bid for a 50.5% stake in ProSienbenSat.1. (Bloomberg)