KKR offers $7.7bn to buy out Axel Springer’s minority shareholders

Bloomberg

KKR & Co. is seeking to buy out minority shareholders of Axel Springer SE in a deal that would value the German publisher at about 6.8 billion euros ($7.7 billion).
KKR offered to pay 63 euros a share in cash — a 13 percent premium over close and about 40 percent more than the price before Bloomberg reported the talks last month. The move is backed by largest shareholder Friede Springer and Chief
Executive Officer Mathias Doepfner. Axel Springer sh-ares rose as much as 13 percent to 63.30 euros in early trading in Frankfurt.
The private-equity firm’s involvement could hand Doep-fner additional financial reso- urces to help the tradition-rich publisher of the Bild mass-circulation daily and Business Insider website with the costly and challenging process of transforming into a digital media group, making it easier to acquire struggling rivals.
Axel Springer also lowered its sales and profit outlook on Wednesday, saying it expects 2019 sales and adjusted Ebitda to drop below last year’s level. Adjusted Ebitda in 2020 is expected to be “significantly below” figures for this year as the company
focusses on growth, it said.
“Our growth plans will require significant investment in people, products, technology and brands over the next years,” Doepfner said in a statement. “KKR is a long-term focussed partner who respects and supports our commitment to independent journalism.”
Both Springer — the widow of the company’s founder — and CEO Doepfner plan to keep their holdings that together amount to more than 45 percent of the company. A buyout of minority
investors would see Axel Springer join Bertelsmann, the German publisher that owns Penguin Random House, in being shielded from the scrutiny of public markets.
More companies are being taken private thanks in large part to buyout firms’ swelling cash reserves. The private equity industry, including real estate, debt and venture funds, is sitting on about $1.4 trillion in unspent cash, according to data compiled by Bloomberg, as institutional investors pour client money into the funds seeking returns.