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Bertelsmann eyes RTL move

Conglom may seek full control

Seeking to attain greater focus on its TV biz, Bertelsmann may pay an estimated $1.5 billion to take full control of RTL Group, Europe’s largest broadcaster.

On Tuesday, the German media giant confirmed press reports that it was examining an offer for the 10.2% stake in publicly traded stock that it doesn’t already own and said it had spoken to broadcasting group execs on the subject.

“Any offer would be subject to a number of conditions, and in particular, to the prior approval of the Bertelsmann management and supervisory boards,” Bertelsmann said in a statement. “There can be no assurance that any offer will be made by Bertelsmann.”

RTL has 42 TV channels and 32 radio stations throughout Europe, including Germany’s leading commercial TV web RTL Television, France’s M6 and Five in the U.K. It also owns FremantleMedia, one of the largest international TV production and distribution companies in the world.

Bertelsmann said it did not envisage the price for an offer, if made, at more than e82 ($120.85) per share. RTL shares closed up 2.4% in Frankfurt on Tuesday at $103.34.

Bertelsmann’s main revenue engine, RTL saw annual sales of $8.2 billion last year, accounting for more than 28% of its parent group’s total revenue, which reached $28.5 billion in 2006.

The purchase could be the first major step for Bertelsmann’s incoming topper Hartmut Ostrowski, the head of the group’s Arvato services division, who will replace chairman-CEO Gunter Thielen on Jan. 1.

Bertelsmann has a penchant for consolidation. In 2006, the group moved swiftly to fend off a public stock offering by paying $5.8 billion for the 25% owned by its only outside shareholder, Groupe Bruxelles Lambert’s Albert Frere.

The deal returned full control of Bertelsmann, which also owns half of music company Sony BMG and magazine publisher Gruner + Jahr, to the Mohn family.

Acquiring 100% of the RTL Group would give it full control of its most important and fastest-growing business, provide freedom from free-float shareholders and lower costs.

While the conglom did not say how it would fund the acquisition, observers have speculated that the group would likely sell off assets as it narrows its focus on TV.

In a statement, RTL said that it would assess a Bertelsmann offer “in accordance with the interests of the company, its employees and its minority shareholders.”

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