In 2007 a consortium comprising Mediaset, Goldman Sachs Capital Partners and Cyrte, the investment company in which Endemol co-founder Jon de Mol is a minority shareholder, paid some $3.5 billion for Telefonica’s controlling stake in Endemol in a three-way split.
But they largely used leveraged loans that now weigh heavily on the Dutch unscripted TV giant best known for “Big Brother,” whose other formats include “Deal or No Deal” and “Extreme Makeover: Home Edition.”
Endemol recently decided to put Time Warner’s $1.4 billion bid for Endemol on hold because its creditors think the content company is worth more money, according to sources.
Creditors, which include private equity funds Apollo Management, Centerbridge and Providence Equity Partners, also reportedly extended their capital restructuring deadline to Dec. 13.
Endemol is now pushing ahead with talks to secure a debt-for-equity swap that would cut its current $3.7 billion debt to about $670 million.
Mediaset and Italian equity fund Clessidra have reportedly offered to inject $268 million in Endemol to raise their current 33% stake to 51%, with lenders owning the remaining minority interests.
Mediaset has reportedly warned Endemol that the outcome of the restructure could affect the companies’ relationship, telling Endemol that it intended to renegotiated all existing agreements, as well.
The larger debt for equity swap now on the table would instead dilute Mediaset’s stake to an estimated 10%-12% share.