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Bertelsmann shake-up will give "maximum flexibility"

A change in Bertelsmann’s legal structure will give the family business “maximum flexibility” to bring in outside investors, while allowing the Mohn family to retain control of the German media conglomerate.
Bertelsmann shake-up will give "maximum flexibility"

A change in Bertelsmann’s legal structure will give the family business “maximum flexibility” to bring in outside investors, while allowing the Mohn family to retain control of the German media conglomerate, a company spokeswoman told CampdenFB

She was commenting after the business, which controls RTL TV, Random House books and publisher Gruner + Jahr, completed the switch from being a stock corporation – known as Aktiengesellschaft – to a partnership limited by shares, Kommanditgesellschaft auf Aktien. The family has become a general partner under a Societas Europaea set-up – a European limited company – with full control of the board. 

The move, which sees the company change its name to Bertelsmann SE & Co KGaA from Bertelsmann AG, could mean the Mohns can sell shares to external investors without losing control of the Gutersloh-based company.  

Asked how important control was for the Mohn family, the spokeswoman told CampdenFB: “It is important, otherwise we wouldn’t have done this [change].”

She added: “This change allows us maximum flexibility to determine the direction of the company.”

The family is known for its aversion to outside investors. In 2006, family member and vice-chairwoman Liz Mohn blocked a possible initial public offering. The family paid €4.5 billion for Belgian investor Albert Frere’s 25% stake, leading to large debts.

The media group is said to be looking for ways to raise billions of euros to pay off its debt, pegged at €4.9 billion, and fund acquisitions.

According to the spokeswoman, a management meeting in mid-September will likely resolve matters related to outside financing, including how many shares the Mohn family will sell to investors.

The company, which appointed non-family Thomas Rabe as chief executive in March, registered a slight increase in fiscal 2011 revenues to €15.3 billion from €15.1 billion the year before. It will announce its half-yearly results on 31 August.

“We are in the process of defining a new strategy with a new chief executive on board,” the spokeswoman added.

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