Private-equity firms Permira and Kohlberg Kravis Roberts & Co. agreed to buy out Luxembourg-based SBS Broadcasting SA Monday in a deal valuing one of Europe’s largest broadcasters at about 1.7 billion euros ($2.07 billion).
Permira and KKR will pay SBS cash for the company’s assets, which include 16 television channels, 21 pay-TV channels and 11 radio networks reaching 100 million people in nine countries. They also will assume the broadcaster’s debt, bringing the value of the deal excluding minority interests to 1.86 billion euros ($2.27 billion).
The deal still needs antitrust approval from the European Union, Romania and Switzerland. It also needs to win the support of two-thirds of SBS shareholders at an extraordinary meeting slated for October.
Harry Evans Sloan, SBS’ executive chairman, said Permira and KKR had suggested liquidation as the “most effective method” of taking the company over.
The company’s assets will be transferred to a new business, the old company will be liquidated and the cash purchase price distributed to shareholders with a payout of 46 euros ($56.26) a share. After news of the deal, shares of SBS rose 6.7 percent to 46.19 euros on the Euronext exchange.
Sloan started the company in 1989 with three Scandinavian television channels, promising he wouldn’t take a salary until the company earned a net profit.
“I didn’t expect it to take 12 years but I guess I didn’t expect myself to want to start so many new stations all the time during that period,” he told investors during a conference call.
SBS grew rapidly, gobbling up commercial television and radio stations in Belgium, Finland, Greece, the Netherlands and fast-growing markets in Hungary and Romania.
Sloan took his pay in stock options, saying this aligned him with shareholders and made him assess the buyout as a good deal for both the company and the shareholders.
“If I thought there was a better strategic deal or if I felt this was a period of consolidation, a feeding frenzy ... I think I would have recommended something different,” he said.
SBS Chief Executive Markus Tellenbach will remain head of the new broadcasting company. “I have no reason to believe the group is going to materially change under the private-equity guys,” he said. “Management supports the deal because we believe we can execute our plans and our vision in a continued manner.”