Monday February 5th, 2001
By Sabine Bub
EM.TV & Merchandising AG supervisory board chairman Nickolaus Becker denied reports on Monday that he was blocking a deal with German media giant Kirch
"The supervisory board chairman is not opposing a deal with the Kirch Group," Becker said in a written reply to Reuters' inquiries.
Becker's statement was issued after a source familiar with the situation told Reuters earlier on Monday that the management of the troubled company was deeply split over the rescue deal with Kirch, with Becker leading the opposition.
The source said Becker opposed the deal with Kirch, which is advocated by EM.TV Chief Executive and major shareholder Thomas Haffa.
"The power struggle between Becker and Haffa is more and more coming to a head," the source said, adding that a supervisory board meeting on Sunday failed to resolve the management split.
Under the terms of a proposed deal, Kirch would acquire half of EM.TV's 50 percent stake in Formula One Holding SLEC for $550 million and a stake of up to 16.74 percent in the debt-laden company in return for television programme assets.
An EM.TV spokesman declined to comment on progess towards a deal, but said a decision concerning the company's future should be reached in the next few days.
Sources said earlier that a deal with Kirch, giving EM.TV's larger cross-town peer a stake in the precious Formula One business, was closer than before.
Shares in EM.TV initially gained more than six percent on hopes of an imminent deal before giving up the gains in a weak market to stand 2.02 percent lower at 7.77 euros by 1455 GMT. The Neuer Markt Nemax 50 index was down 2.95 percent.
EM.TV stock was trading some 105 percent above its 12-month-low of 4.03 euros reached on January 5 this year but the stock was still 93 percent below its 12-month high of 120 euros set on February 14 last year.
The stock was pummelled lower last year as the company fell into severe financial trouble after a buying spree in which it bought the SLEC stake and the Jim Henson company, producer of the Muppets and Sesame Street.
Analysts estimate EM.TV's debt at around 1.12 billion euros.
Despite the prospect of Kirch rescuing EM.TV, talks about a deal have run into difficulties over details.
Sources have said third parties are also lining up to aid EM.TV, with most of the potential saviours hungry for a stake in its prize SLEC stake. Industry sources have said that U.S. investment bank Hellman & Friedman is aiming to buy the SLEC stake.
Walt Disney Co. is also believed to be following the events at EM.TV closely as it is reported to be interested in its Jim Henson unit.
Additional reporting by Marius Bosch