UTH Russia Bids for 75 Percent Interest in CTC Media

MOSCOW: Modern Times Group (MTG) has received an offer from UTH Russia for the purchase of a 75 percent stake in CTC Media.

The acquisition bid comes in response to the amendment to the Russian law “On Mass Media,” which will impose further restrictions on non-Russian ownership of Russian TV companies starting January 1, 2016.

The privately held Russian commercial television broadcasting group UTH has made an offer of $200 million in cash for the 75 percent interest. Following this transaction, the direct and indirect ownership of the group’s operating businesses in Russia would comply with the Russian law requirement that at least 80 percent of the ultimate beneficial ownership and control of the businesses is held by Russians.

CTC Media's board of directors has appointed a special committee composed of independent directors—consisting of Werner Klatten, Tamjid Basunia and Jean-Pierre Morel—to review and evaluate this offer. The discussions with UTH are still in early stages.

Werner Klatten, the chairman of the special committee, commented: “We are disappointed that the change in Russian law regarding foreign ownership of television companies may require a sale transaction, but we are pleased that the efforts of the board have resulted in an offer for a potential transaction that would, if successful, allow us to secure value for our public stockholders and our largest stockholder. Although we cannot guarantee that we will be able to conclude this proposed transaction, or when it would be consummated, we believe this offer to be worth progressing further as a means of achieving compliance with the amended Russian Mass Media Law before year end.”