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Bloomberg
KKR & Co and Axel Springer SE are in talks about a strategic investment by the private equity firm that could take the German publisher private.
KKR may launch a tender offer to buy out the minority shareholders in Axel Springer, which owns the mass-circulation daily Bild, according to a statement. Friede Springer — the widow of founder Axel Springer who has the largest stake — and Chief Executive Officer Mathias Doepfner support the potential investment and plan to keep their holdings.
Shares of Axel Springer rose as much as 23 percent to 55.05 euros in Frankfurt on news of the possible offer, which was first reported by Bloomberg. It was their biggest daily jump since 2013 and propelled the company’s valuation to 5.9 billion euros ($6.6 billion).
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.
With KKR on board, it could also make it easier for the company to fund acquisitions and capitalise on a bout of turmoil and retrenchment in the digital media industry. Springer shares had lost more than a quarter of their value in the past year, denting its ability to do deals.
More public 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. Last year, the number of public-to-private deals hit its highest in more than a decade, according to Bain & Co.’s annual private equity report.
Doepfner has spent almost two decades turning Germany’s biggest publisher into a digital media company, shedding printing, newspaper and magazine operations to push into online news with products such as Business Insider and classifieds sites including job portal Stepstone. It now makes almost three quarters of its sales from digital businesses. The sector has been looking shakier in recent years, with several news sites closing or cutting jobs as their owners try to staunch years of losses.