Fortune 500 media and entertainment company Time Warner said that it will acquire 19 million newly issued common shares, approximately a 31% interest, of Central European Media Enterprises, a broadcasting company, for $241.5 million.
The newly issued Central European Media Enterprises (CME) common shares consists 14.5 million shares of Class A Common Stock at a price of $12 per share and 4.5 million shares of Class B Common Stock at a price of $15 per share.
In connection with this transaction, Time Warner is agreeing to allow CME founder and Non-Executive Chairman Ronald Lauder to vote Time Warner’s shares of CME for at least four years, subject to certain exceptions. Also, Mr Lauder has pledged to support Time Warner’s appointment of two of its designees to CME’s board of directors.
The closing of the investment is subject to a vote of CME’s shareholders and certain regulatory approvals, and Mr Lauder has committed to voting the shares he controls in favor of the transaction.
The transaction is expected to close before the end of the second quarter of 2009.
Citigroup is serving as financial advisor to Time Warner. J.P. Morgan is serving as financial advisor to CME.
In addition, Warner Bros. and CME have separately agreed to form a partnership to launch and operate new thematic television channels in current CME territories. These channels, some of which will be Warner Bros. branded, will feature international films and television series, including titles from Warner Bros.’ industry-leading library.
