Kirch may go public

Confab with Murdoch, Berlusconi skedded

MILAN — Germany’s powerful but secretive media conglom the Kirch Group may be going public.

Per an unconfirmed report Friday in Italy’s financial daily Sole 24 Ore, Kirch would be listed on the Frankfurt stock exchange.

Even more intriguingly, the move would be coordinated with media tycoons Rupert Murdoch and Silvio Berlusconi, with whom Kirch Group founder and owner Leo Kirch has been reportedly meeting to discuss a strategic alliance. Also, Kirch today will hold a meeting with News Corp. and Mediaset to discuss an alliance. The companies will apparently discuss possible stock swaps.

The alliance among the media kingpins would mean that Murdoch’s News Corp. and Berlusconi’s TV arm Mediaset could take shares in Kirch’s company. Per the Italian paper, financial player and Saudi prince Al Waleed Bin Talal, who is already a shareholder in Mediaset, would also be involved as a shareholder in the publicly listed Kirch Group.

A Kirch spokesman had no comment on the report.


If put into place, the stock market listing could help Kirch solve his financial problems, which have been very publicly exacerbated by big-buck outlays for product in Hollywood and by the costs of launching a digital platform in Germany.

A listing by the Kirch Group would be the latest in a series of moves by once-stodgy and sometimes excessively guarded German companies to open themselves up to public scrutiny and accountability.

Such a listing would also help squelch allegations of tax evasion and questionable business practices, which have increasingly dogged the Kirch Group in recent years.

A number of German media companies, including Teutonic station Pro Sieben, have gone public in the last year — and as a result, have taken advantage of the bull market and boosted their international profile.

As for Murdoch and Berlusconi, the two would get access to Kirch’s very rich film and TV library and to rights for major sports events held by the German group.

Murdoch beachhead

Moreover, Murdoch would finally be able to establish a beachhead in the heart of Europe (his main satellite operation, BSkyB, is centered in the U.K.), while the Italian tycoon would finally succeed in extending his media operations beyond southern Europe.

In a related development involving the same powerhouse Euro media companies, Mediaset and Kirch are reportedly revving up a joint studio together with Spanish broadcaster TeleCinco. The new entity — hinted at recently by Kirch Group managing director Jan Mojto — would concentrate on the production of TV shows and films for the worldwide market.

Mediaset president Fedele Confalonieri said in the Italian newsweekly Il Mondo last week that the new studio will have what he calls “a very large” budget to produce and distribute film and TV shows.

“This is the time of alliances in Europe. The agreement with Kirch could involve the acquisition of shares, by one side or the other, but we are still defining all the details,” Confalonieri told the magazine.

Kirch already holds a small stake in Berlusconi’s Mediaset; Mediaset holds a 25% stake in TeleCinco.

Core shareholders

“These three groups will be the core shareholders in the new production entity, but other partners might join us later,” Confalonieri added.

As for the involvement of Murdoch in the Euro production entity, the Italian exec said, “The chapter is not closed.”

Earlier this year, Berlusconi offered to sell a majority stake in Mediaset to Murdoch, but nothing ever came of those talks.

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