German media company Bertelsmann has fixed the price for the sale of 25.5 million ordinary shares of its subsidiary RTL Group on the stock market at €55.50 per share, resulting in a total of €1.4 billion of fresh cash ending up in its pocket.
The sale price is, however, disappointing as it remains at the low end of the price range set by Bertelsmann which amounted to between €54-€62. This might reflect concerns by stock market investors regarding the prospects of traditional TV broadcasters which face increased competition by new players such as OTT and VOD providers.
Through the move, which was confirmed in early April 2013, Bertelsmann will reduce its stake in Europe's largest TV broadcast group from 92.3% to 75.1%.
The share capital of RTL Group has been admitted to the regulated market (Prime Standard) of the Frankfurt Stock Exchange, in addition to the existing listings on the Luxembourg Stock Exchange and Euronext Brussels. The first day of trading for the offered shares in Frankfurt will be 30 April 2013. A total of 24.1% of RTL Group's shares will be in free float on the stock exchange markets. RTL Group and Bertelsmann have signed lock-up agreements for a period ending six months after the closing date of 3 May 2013.
"I am very pleased that we can successfully complete the book-building process for the RTL Group shares," said Thomas Rabe, chairman and CEO of Bertelsmann. "We will use the proceeds from the sale of shares to implement our corporate strategy with its four key priorities – strengthening the core, digital transformation, expansion of growth platforms and entering growth regions. Our goal is to make Bertelsmann a faster growing, more digital and more international company in the years ahead."
Bertelsmann's CFO, Judith Hartmann, added: "The sale of RTL Group shares is one of Bertelsmann's biggest capital market transactions ever. We are and will remain the majority shareholder in RTL Group – and will continue to support the strategic development of the business."