BERLIN — He may be down, but he’s definitely not out. Bankrupt media mogul Leo Kirch has turned his year-long battle with publisher Axel Springer into a legal war.
At Springer’s AGM on June 26, he accused the board and main shareholder Friede Springer, widow of the company’s founder, of triggering the Kirch Group’s financial downfall.
Kirch, who owns 40% of Springer, blames company execs for exercising a put option demanding a refund of its 738 million euro ($725 million) stake in Kirch’s main TV unit ProSiebenSat 1 broadcasting group rather than accepting his offer to swap the put option for a bigger stake in the unit.
That would have given Springer a $99 million profit instead of a $725 million claim rendered almost worthless after Kirch’s insolvency.
Springer, which publishes Germany’s best-selling tabloid Bild, exercised the put option in January, saying it did not want to get involved in commercial TV. Kirch could not refund the money, sparking events which lead to the group’s insolvency.
Kirch wants an independent probe into the use of the put option, which he maintains was exercised to force him to sell his stake in the publisher and leave Friede Springer free of an unwanted minority shareholder.
Friede Springer has been trying to wrest control of the company from Kirch since the 1980s.
“The board acted in the interests of the main shareholder Friede Springer, but not in the interests of the company and other shareholders,” Kirch lawyer Ronald Frohne told shareholders.
Frohne presented shareholders with a curious motion to force Springer to sue its own board and Friede Springer for damages stemming from the use of the put option instead of accepting a stake in the profitable broadcasting group.
Springer CEO Mathias Doepfner rejected Kirch’s claims: “Axel Springer Verlag had no interest in weakening the Kirch Group,” he said. “After lengthy negotiations, we failed to find an alternative solution. We had to exercise the put option.”
Kirch is trying to sell its Springer stake to pay back a $713 million loan to Deutsche Bank secured by the stake.
Meanwhile, Springer is now weighing a bid for Kirch’s core TV and rights division Kirch Media with fellow Teutonic publisher Heinrich Bauer.
That could leave it in control of ProSiebenSat 1.