Company nabs stake for $241.5 million
Time Warner has snapped up 31% of Ronald Lauder’s Central European Media Enterprises for a reported $241.5 million.Under the terms of the deal, Lauder will vote Time Warner’s stock in CME for at least four years and accept two Time Warner reps onto CME’s board of directors. Warner Bros. and CME have also announced a partnership to launch thematic TV channels in the region. The channels, some Warner branded, will feature international pics and TV skeins, including titles from Warner Bros.’ library. Lauder said the deal “will accelerate CME’s future development and take it to levels I could only dream of 15 years ago.” Time Warner CEO Jeff Bewkes said, “While the region has been experiencing the impact of the global economic crisis, we believe CME is ideally positioned over the long term as Central and Eastern Europe returns to significant growth and the media sector in these countries continues to evolve.” Venture fits in with Time Warner’s plans to create, package and deliver programming on multiple platforms globally, he added. CME, which is registered in Hamilton, Bermuda, and run from London, operates 22 channels in the Czech Republic, Bulgaria, Romania, Croatia, Slovakia, Slovenia and Ukraine. Its footprint covers 97 million people. CME, like other businesses in Europe, has been hit by dropping ad sales and a comparatively strong U.S. dollar. It expects revenues of $135 million-$145 million for the first quarter, down from $223 million year on year. Prexy Adrian Sarbu cautioned that “the first quarter of 2009 has been extremely challenging” and reported that the market “may result in further impairment of some of CME’s assets.” News of the deal boosted shares of both companies. CME’s Nasdaq-listed stock soared 45% to $14.50, while Time Warner gained 10% to $8.62 amid an up market.