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Bertelsmann eyes public money but family control to remain strong

German media conglomerate Bertelsmann, controlled by the Mohn family, will consider either listing on the stock exchange or bringing in private equity investment in a bid to access finance for growth.
Media group Bertelsmann, headed by Liz Mohn, is considering going public

German media conglomerate Bertelsmann, controlled by the Mohn family, will consider either listing on the stock exchange or bringing in private equity investment in a bid to access finance for growth.

That’s according to a spokeswoman for the family business, who told CampdenFB that a decision hasn’t been made on “how or when” Bertelsmann will bring in outside investors.

“It is possible through an initial public offering or even getting private equity investors,” she said. “It is a strategic process and the Mohn family will decide in September, and it will then be implemented.”

The company has changed its legal structure to allow it to access outside finance, said a statement on 28 March. The family business, which is currently a stock corporation, will become a Kommanditgesellschaft auf Aktien, or a partnership limited by shares.

Through this structuring, the Mohn family will retain control of the executive board, while new shareholders could potentially buy stakes in the Gütersloh-based company. The business will become two entities, added the spokeswoman – KgaA will be the operating company with limited outside shareholders, while Societas Europaea, the executive side, will be controlled by the Mohn family.

“The conversion will be an ‘identity-preserving change of legal form’, wherein the group’s ownership structure and corporate structure remain unchanged,” said the statement.

The move by the family, which owns 19.1% of the company and controls the rest through foundations, comes as the media group looks to raise billions of euros to fund acquisitions and pay off its huge debt.

“Our primary goal is to grow the company faster, to make it more digital and international,” said Thomas Rabe, non-family chief executive. Whether outside investment will dilute family ownership is still not known.

Rabe’s announcement followed a small increase in the company’s fiscal 2011 revenues to €15.3 billion, from €15.1 billion the year before.

The group, best known for RTL TV and publisher Random House, saw its net debt reduce to €1.8 billion from €1.9 billion in 2010, but its broader economic debt remained unchanged at €4.9 billion.

Founded in 1835, the company made headlines in 2006 when family member and vice-chairwoman Liz Mohn blocked a possible IPO. The family paid €4.5 billion for Belgian investor Albert Frere’s 25% stake, leading to large debts.

Fellow family members Christoph and Brigitte Mohn also sit on the group’s board.

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