Selling part of RTL, whose shows include The X Factor and Britain’s Got Talent, would finance global and digital growth
Bertelsmann is looking to sell a €2bn (£1.7bn) stake in Europe’s biggest advertiser-funded broadcaster RTL, which makes UK shows including The X Factor, to finance digital growth and international expansion.
Privately-owned German company Bertelsmann has informed the board of directors of RTL, the Luxembourg-based, publicly-listed company which sold Channel 5 to Richard Desmond in 2010, that it is considering reducing its stake from 92.3% to about 75%.
RTL’s London-based production, rights and distribution business Fremantle Media owns UK subsidiaries Thames, co-producer of The X Factor and Britain’s Got Talent with Simon Cowell’s Syco, and Talkback, which makes shows including Never Mind the Buzzcocks, Celebrity Juice and QI.
RTL has been touted as a logical suitor to buy Dutch TV producer Endemol, maker of shows including Big Brother and Eight Out of Ten Cats, to boost the production division FremantleMedia. RTL and Bertelsmann have always denied any formal interest in Endemol.
Bertelsmann’s executive board has not made a final decision on whether to proceed with a sale of the 17.3% stake, which at Thursday’s closing share price of €75.5 it is valued at a touch over €2bn.
“The possible sale of RTL Group shares would be one element in financing the long-term corporate strategy,” said Thomas Rabe, chairman and chief executive of Bertelsmann. “The goal is to make Bertelsmann a faster growing, more digital and more international company in the years ahead. The planned transaction would prepare the ground for this.”
Bertelsmann – which also owns publisher Random House, which will be the senior partner in the proposed merger with Pearson’s Penguin, magazine business Gruner + Jahr and music publishing joint venture BMG – said that a further reduction of its stake in the company’s largest division to 50.1% was “not conceivable”.
“RTL Group will remain a successful core business for Bertelsmann, and a strong pillar of our portfolio,” Rabe said. “Bertelsmann will also support the strategic development of RTL Group.”
Bertelsmann is deeply convinced of the long-term attractiveness of television and the TV production business. RTL Group makes major contributions to cash flow and has promising business and growth prospects.”
The company is also looking at raising cash by bringing on board new shareholders after Rabe changed the group’s legal structure to allow the Mohn family, which controls Bertelsmann, to sell stakes to investors but maintain tight control of the executive board.
A joint statement from RTL’s executive committee – Anke Schaferkordt, Guillaume de Posch and Elmar Heggen – said that the broadcaster’s financial results have “repeatedly demonstrated that RTL Group is a very attractive business, generating value for shareholders”.
“We are the only pan-European free-TV group with a worldwide content production powerhouse,” they said. “We have leading market positions in the countries we operate in, strong brands and a healthy financial position. Based on these strengths, we have defined a clear strategy to continue our success story, focussing on investments in core, content and digital.”
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