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UPDATE 1-Springer JV buys control of Polish website from TVN
June 4, 2012 / 2:25 PM / 5 years ago

UPDATE 1-Springer JV buys control of Polish website from TVN

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* Springer/Ringier to pay PLN 956 mln for 75 pct of Onet

* TVN shares rise 2.4 pct, Springer flat

By Maria Sheahan and Adrian Krajewski

FRANKFURT/WARSAW, June 4 (Reuters) - German publisher Axel Springer and Swistzerland's Ringier agreed on Monday to pay $267 million to buy 75 percent of Poland's top Internet portal Onet.pl from Polish broadcaster TVN to boost their position in eastern Europe.

For heavily indebted TVN, one of Poland's top two private broadcasters, the sale will bring the media group back to its roots after it agreed to forego control of its pay-television unit to Vivendi's Canal+.

Analysts said they were surprised by the 956 million zloty price tag Ringier Axel Springer (RAS), which already publishes Poland's top tabloid and a local version of Newsweek, agreed to pay for control of Onet.

The price could still increase to over 1 billion zlotys ($279.3 million) at its closing, expected at the turn of 2012 and 2013 after regulatory approval.

The deal values Onet at 1.275 billion zlotys, below its book value of 1.374 billion zlotys, but much more than analysts had expected.

"I expected 860-870 million zlotys for the whole Onet, while TVN will get more from the sale of a 75 stake, so it's positive news for TVN," said Piotr Janik, analyst at KBC Securities.

Shares in TVN, which will retain an indirect 25 percent stake in Onet, jumped as much as 3.4 percent and were 2.41 percent higher by 1419 GMT. Springer shares were nearly flat.

"The cash consideration will strengthen TVN's capital structure, as we intend to use the proceeds to reduce our indebtedness - a key risk mitigating factor in the volatile and uncertain European macroeconomic environment," TVN Chief Executive Markus Tellenbach said in a statement.

TVN, which has been fighting headwinds of local advertising market's malaise as well as high costs of debt in the face of a volatile zloty currency, said it would book a one-off loss of 350 million zlotys on the deal. ($1 = 3.5799 Polish zlotys) (Editing by Chris Borowski and Hans-Juergen Peters)

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