German company to buy stake in Doğan

Hurriyet Daily News with wires

The DMG is Turkey’s biggest media company and the stake would be worth 47 million euros ($60.6 million).

Axel Springer will purchase the stake in Istanbul-based DMG from owner Doğan Holding, Axel Springer said in a statement yesterday. It will also take a seat on DMG’s board, reported Bloomberg.

After DMG finalizes its current capital increase process, Doğan Holding, will implement a block sale of 7.1 million shares of the DMG to Commerz Film, which is 100 percent owned by Axel Springer, according to a Doğan Holding filing with the Istanbul Stock Exchange. Doğan Holding has 72.76 percent shares in DMG’s capital. The nominal value of each DMG share is YTL 1 and Axel Springer will pay 47 million euros in cash for the DMG shares, reported the Anatolia News Agency citing the company statement. Commerz Film’s newly purchased shares will have a 9.8 percent share in DMG’s capital structure, said Doğan Holding.

Doğan Holding, the media-to-energy conglomerate, said Nov. 19 it planned to sell a minority share in DMG to a "strategic partner" to help cut debt as sales growth in Turkey’s advertising market slowed.

Axel Springer will also sell 5.1 percent of its shares in Doğan TV Holding to DMG for 47 million euros, with an additional 30 million euros due by March 2012, reported Bloomberg, citing the statement. Back in November 2006, DMG and Axel Springer had signed a share purchase agreement on the sale of DMG’s 25 percent stake in Doğan TV Radio, or DTVR at a 375 million euros, implying a total equity valuation of 1.5 million euros for DTVR. Axel Springer said the size of the stake it bought in DMG would depend on the result of a capital increase planned by DMG.

Daily News is a Doğan Media Group publication.