William Malcolm

PPF Group Completes CME Acquisition

PPF Group has completed the acquisition of Central European Media Enterprises (CME). PPF now fully controls CME’s activities in the Czech Republic, Slovakia, Romania, Slovenia, and Bulgaria. PPF stated this in a press release today. In the Czech Republic, PPF thus controlled the Nova television group, in which it already held a stake until 2004, when CME sold it.

CME shares were withdrawn from the NASDAQ Global Select Market and the Prague Stock Exchange and will cease to exist upon completing the acquisition.

Shareholders who owned CME Class A shares immediately before the acquisition’s effective date will receive $4.58 per share.

CME shares stopped trading on the Prague Stock Exchange on Friday, 9 October. For investors who have not yet sold the shares, CME shares will disappear from their account today, and they will be paid for them. Shareholders do not have to do anything. PPF will pay the amount in dollars. At the time of announcing the agreement a year ago and at the time of approval at the General Meeting, the exchange rate was practically the same as now, around 23 crowns, he added.

The price of 105 crowns per share is reasonable with regard to the current situation on the markets, says Wood and Company broker Radim Krejčí. Thus, small shareholders should be satisfied.

According to him, the loss of CME is, of course, a pity for the Czech capital market. With the elimination, the Prague Stock Exchange loses an interesting title with a relatively high market capitalization at Moneta’s level. CME’s issue was in the top ten in terms of trading volumes, but it was not among the “blue chips,” he noted. The term “blue token” refers to the shares of the largest and most profitable companies traded on the stock exchange.

Didier Stoessel, who oversees the Czech, Slovak, Romanian and Slovenian markets, will take over the CME CEO position immediately. From his previous work with Modern Times Group, HSBC Investment Bank, and Merrill Lynch International, he has extensive managerial and strategic experience in media, technology, and international finance. Luboš Jetmar, who has previously worked for GES Group, will become CME’s CEO in Bulgaria. In Bulgaria, he will be responsible for the operation, strategy, and implementation of further development plans.

Regulatory approvals preceded the transaction from the European Commission and national regulators in some countries, in addition to approval from CME shareholders. “We are aware of the responsibility we are taking on with the acquisition of CME. Its market position is excellent, and we will continue to build a network of independent television channels in each country. We also believe that we will create new business opportunities by connecting media, and CME has numerous and loyal viewers. We will continue to bring them quality and engaging content,” said PPF majority owner Petr Kellner.

“We are taking over an efficient and well-run company with an excellent reputation among viewers. I look forward to working with great people on our TV stations. My priority will be to accelerate the digital transformation of the company, strengthen the creation of my content,” Stoessel added.

CME is one of the leading media and entertainment companies in Central and Eastern Europe. It operates 30 television channels, both free and paid, and broadcasts in five markets an area of 45 million viewers. CME increased its operating profit by six percent last year. At constant exchange rates, it rose 11 percent to $ 187.3 million. The company also repaid a debt of 150 million euros. In the Czech Republic, CME increased its OIBDA operating profit by 7.4 percent to $ 101.6 million.