Such a transaction would be financially attractive for all the parties involved. At the same time, the desire to attend to the minority shareholders of Media Norge is combined with the ambition to create a future-oriented and robust corporate structure for Schibsted Media Group.
- For Schibsted Media Group it is strategically important to secure efficient and future oriented media houses. At the same time, a merger with Media Norge will strengthen our other strategic pillar, online classifieds, Rolv Erik Ryssdal says.
Currently, Schibsted holds 84.2 per cent of Media Norge. Furthermore, an agreement has been made to acquire 1.7 per cent from a group of shareholders based in the southern region of Norway. 12 per cent of the acquisition will be settled through Schibsted shares at NOK 171.35, and 88 per cent through cash at NOK 72.50 per Media Norge share. Schibsted reduces through the transaction the number of treasury shares by 84,225 and has after this 3,982,837 own shares.
The proposal implies that the minority shareholders are offered shares in Schibsted ASA or a cash settlement when the merger is carried through. The transaction values the equity of Media Norge at NOK 7.25 billion. Shareholders controlling 6.66 per cent of the shares and 23.5 per cent of the votes in Media Norge have pre accepted a merger based on this valuation.
The values in Media Norge are related to the online classifieds operations of Finn.no, held 50.01 per cent, and the Aftenposten, Bergens Tidende, Stavanger Aftenblad and Fædrelandsvennen media houses, all owned 100 per cent. Schibsted's assessment is that close to half of the values in Media Norge are linked to online activities. Included in the valuation of NOK 7.25 billion is the Media Norge cash balance of estimated NOK 1.7 billion at year end 2010, adjusted for minority interests in of Finn.no.
Schibsted proposes a merger based on an exchange rate where the shareholders of Media Norge ASA receves a cash amount of NOK 24.17 and 0.2821 shares in Schibsted for each share in Media Norge ASA. This is based on a valuation of each Media Norge share of NOK 72.50 and each Schibsted ASA share of NOK 171.35, and a settlement with two thirds shares and one third cash. Schibsted has approximately 4.0 million treasury shares, and the intention is to uses these in the merger transaction.
- To merge Schibsted ASA and Media Norge is sensible for several reasons. First of all, we create a structure that makes it easier to cooperate across the group's units. This will enhance our ability to create value, and at the same time free up resources that can be used to strengthen our subsidiaries' core activities. Secondly, we solve the challenge linked to the minority interests in Media Norge. Currently, the minorities are in a locked up situation, and an IPO of Media Norge would be less effective in today's situation. The merger that we suggest represents a better solution, which secures equal treatment for all shareholders in Media Norge. At the same time, the valuation is financially attractive for all parties involved, Rolv Erik Ryssdal says.
The merger will not imply significant changes in the operations or organizational setup of Media Norge, and the executive management will continue as before. The intention is to preserve the corporate governance model and the model for editorial integrity that is well established in Media Norge today.
Schibsted's intention is to initiate merger negotiations as soon as possible. Necessary general meetings are expected to be carried out in Q1 2011. The intention is to close the merger during Q2 2011.