CME Ups Stake in Ukraine Outlet

HAMILTON, February 5: Central
European Media Enterprises (CME) has entered into agreements with its partners
in Studio 1+1 to acquire all minority interests in the Ukrainian broadcaster,
upping its stake from 60 percent to 90 percent, with an option to acquire the
remaining 10 percent.

The 30 percent interest
CME will acquire includes interests that it had previously agreed to acquire
from Igor Kolomoisky. The total consideration payable on completion of the
purchase of the 30 percent stake will be approximately $219.6 million. Boris
Fuchsmann and Alexander Rodnyansky are entitled to receive cash consideration
of $79.6 million, and they will have the right to sell their remaining 10
percent stake to CME. The put option has an initial minimum price of $95.4
million in the first year, $102.3 during the second year and thereafter $109.1
million or an independent valuation; whichever is greater.

CME expects to fund the
transaction from cash on hand and its current credit facilities. The deal is
expected to close by the end of the second quarter. Michael Garin, CME’s CEO,
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.”

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 percent and
prime-time audience share of 18.2 percent in 2007.

—By Mansha Daswani