CENTRAL EUROPEAN MEDIA ENTERPRISES TO BUY OUT MINORITY PARTNERS IN STUDIO 1+1 IN UKRAINE
[Tisková zpráva] Hamilton, Bermuda – February 5, 2008 – Central European Media Enterprises Ltd. (“CME”) (Nasdaq/Prague Stock Exchange: CETV) today announced that it has entered into agreements with its partners in Studio 1+1 to acquire all minority interests in the Studio 1+1 Group of companies. Upon completion of this transaction, CME will own 90% of Studio 1+1 and will have a right to acquire the remaining 10%. Currently CME holds 60% of Studio 1+1. CME expects to fund the transaction from cash on hand and its current credit facilities. The transaction is expected to close by the end of the second quarter of 2008 following the receipt of certain regulatory approvals.
Michael Garin, CME’s Chief Executive Officer, commented: “This is a landmark moment for CME as we achieve another key goal of our growth strategy. Ukraine is our largest market in terms of population. We are convinced that in the next few years Ukraine will also become the largest market in terms of our revenue and earnings. As we have proven in other countries, full control is a critical step towards delivering outstanding performance and strengthening our market position.”
The 30% interest CME will acquire at closing includes interests that CME had previously agreed to acquire from Igor Kolomoisky pursuant to option rights which Mr. Kolomoisky is assigning to CME. The total consideration payable on completion of the purchase of the 30% interest will be approximately US$ 219.6 million. Boris Fuchsmann and Alexander Rodnyansky are entitled to receive cash consideration of $79.6 million. Under the terms of our agreement with Mr. Kolomoisky, consideration payable to him may be in cash or Class A shares of CME.
Following the closing of the purchase of the 30% interest, Boris Fuchsmann and Alexander Rodnyansky will have the right to put their remaining 10% interest to CME. The put option has an initial minimum price of US$ 95.4 million in the first year, US$ 102.3 during the second year and thereafter US$ 109.1 million or an independent valuation whichever is the greater. The call price is set at US$ 109.1 million from closing. After a year, the call price will be based on an independent valuation with a minimum price of US$ 109.1 million. If CME exercises its call rights, CME’s partners have the right to receive consideration in cash or Class A shares of CME.
Launched in 1997, Studio 1+1 is one of the most popular national broadcasters in Ukraine, reaching almost 47 million people with an all-day audience share of 16% and prime time audience share of 18.2% in 2007.
CME is a TV broadcasting company operating leading networks in six Central and Eastern European countries with an aggregate population of approximately 90 million people. The company’s television stations are located in Croatia (Nova TV), Czech Republic (TV Nova, Nova Cinema, Galaxie Sport), Romania (PRO TV, PRO TV International, Acasa, PRO Cinema, Sport.ro and MTV), Slovakia (Markíza, Galaxie Sport), Slovenia (POP TV, Kanal A) and Ukraine (Studio 1+1, Studio 1+1 International, Kino, Citi). CME is traded on the NASDAQ and the Prague Stock Exchange under the ticker symbol “CETV”.