UPDATE 2-RTL doubles dividend as Bertelsmann considers stake sale

Mon Feb 25, 2013 11:19am EST

* Dividend for 2012 10.50 eur/shr vs 5.10 previously

* 2012 net profit down 14.2 pct, revenue up 4 pct

* Targets 50-75 pct dividend payout ratio in future

FRANKFURT, Feb 25 (Reuters) - RTL Group is to more than double its dividend for 2012, providing cash for parent Bertelsmann, which is considering a sale of a stake in Europe's biggest broadcaster.

The sale would help German media group Bertelsmann, which holds 92.3 per cent of RTL voting rights, to raise money for an overhaul of its business to catch up with rapidly changing markets.

Bertelsmann and British publishing group Pearson in October last year revealed plans to merge their publishing units Penguin and Random House to compete with Amazon and Apple, leaders in the ebook market.

RTL, maker of "Idol" talent shows, said on Monday the increase in the dividend would give it a more efficient capital structure while retaining flexibility to invest.

The dividend for 2012 would total 10.50 euros per share compared with 5.10 euros for 2011.

The total payout of 1.6 billion euros ($2.1 billion) would come from RTL's existing cash and by a 500 million euro loan made by Bertelsmann itself, RTL said.

After this transaction, RTL's net debt would be about half its annual earnings before interest, tax, depreciation and amortisation (EBITDA) in 2012, in line with the industry, the company said.

RTL's shares were up 1.8 percent at 70.00 euros by 1425 GMT.

SECOND QUARTER DEAL?

Bertelsmann said last month it would sell part of its stake in RTL, while retaining a holding of around 75 percent or more.

This means it could sell as much as 17.3 percent of the broadcaster, a stake with a market value of around 1.9 billion euros.

RTL said Bertelsmann's supervisory board had approved in principle a potential reduction in its RTL holding.

"No final decision has been taken yet on whether or not Bertelsmann will offer any part of its shareholding in RTL Group," RTL's statement said.

Two people familiar with Bertelsmann's plans had previously told Reuters a stake sale could come as early as the second quarter.

RTL's board also decided to target a dividend payout ratio of 50-75 percent of net profit in future, after paying out more than 100 percent in the past.

RTL also reported full-year revenue rose 4 percent to a record 6 billion euros in an increasingly challenging market.

Net profit after minorities fell 14.2 percent to 597 million euros in 2012, hurt by a 72 million euro writedown on RTL's stake in Spanish broadcaster Grupo Antena 3.