News. German media group Axel Springer may revert to private ownership under a potential KKR deal to buy the shares of Axel Springer shareholders (other than majority owner Friede Springer and CEO Mathias Döpfner) and take the company into private ownership. Döpfner and Springer will not be selling their shares. The current share price values the news publisher at around €6bn and the declared aim is to enhance the long-term value of the business, potentially by facilitating acquisitions more easily beyond the scrutiny of public ownership.
Axel Springer is arguably one of the world’s most successful traditional media groups, having diversified strongly from German-only print to global digital in under 15 years. It is the owner of media brands including Bild, Germany’s top-selling daily, Die Welt, and digital services including Business Insider, UpDay and Politico Europe. However, most of the company’s profit now comes from online classified advertising. Total revenues rose 4% to €3.2bn in 2018.
Springer’s impending ‘go private’ deal has been announced just a few months after Schibsted, one of its leading competitors, de-merged its online classifieds company MPI, prompting us to ask: “Which company will want to merge with the $650m-revenue MPI? Perhaps the most tempting scenario involves Springer, arguably the world’s best news-based digital group. The Berlin-based company (50% international and 70% digital) must once have flirted with the idea of a Schibsted like de-merger when it had a classifieds joint venture with US investor General Atlantic during 2012-16. A combined MPI-Springer classifieds group could become an unrivalled global leader. While Springer’s fast-growing classifieds are concentrated heavily in Germany, UK, Belgium, France and Israel (and, therefore, have relatively little overlap with MPI) and account for “only” 38% of group revenues, they account for more than 60% of its EBITDA – and most of the growth of the €6bn company.”
You can (sort of) imagine what KKR may be planning.