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Endemol bill higher than expected

Debt investors decline to participate in buyout

Due to the global credit crunch, a group of financial institutions that underwrote the purchase of Endemol is now stuck with $3 billion in debt that it can’t unload.

A consortium consisting of Silvio Berlusconi’s Mediaset, Goldman Sachs and founder John de Mol bought control of Endemol in May from Spanish telco Telefonica. The group paid $3.5 billion for Telefonica’s 75% stake in the European production giant famous for “Big Brother” and “Deal or No Deal.”

Of that amount, an estimated $3 billion was underwritten by Goldman Sachs, ABN Amro, Barclays Capital, Credit Suisse, Lehman and Merrill Lynch, who in turn planned to offload the debt to other investors.

A debt syndication sale was scheduled for July 24, but was postpone due to skittishness from debt investors.

The keenly fought auction last May for Endemol, arguably the world’s leading entertainment format producer, generated so much noise in financial communities that financial institutions were prepared to offer huge loans to win the business and associated lucrative fees.

The debt involved in the Endemol deal is believed to be worth more than nine times Endemol’s last annual earnings before interest, tax, depreciation and amortization.

In Blighty the credit squeeze has affected the planned sale of U.K. cable outfit Virgin Media, now on hold pending a pickup in the credit market.

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