WARSAW. APRIL 20. INTERFAX C.N
TRAL EUROPE - Poland's Competition and Consumer Protection Office (UOKiK) has discontinued proceedings initiated by Axel Springer that sought approval for the acquisition of a 25.1% stake in Polish television broadcaster Polsat, saying the German publisher must submit another application because the deal would effectively hand over control of Polsat, UOKiK spokesperson Konrad Gruner told Interfax Central Europe Friday.
"In our view, Axel Springer's application pertained to the takeover of joint control over Polsat and not just the acquisition of the 25.1% stake, which is why the proceedings were discontinued," Gruner said Friday.
"If the company intends to execute its concentration plans along the lines of the agreement it already signed, the transaction will require UOKiK approval and Axel Springer will need to file a new motion."
Axel Springer signed a preliminary binding agreement to purchase the quarter stake in early December 2006. The purchase price for the stake of 25.1% will amount to EUR 250 mln. The purchase price may be subject to an upward adjustment until the end of 2008 of up to EUR 50 mln, depending on the future value of the participation.
UOKiK said Friday Axel Springer will in fact take over operating control of Polsat.
"During the proceedings, UOKiK concluded that despite the acquisition of just 25.1% of the shares by the publisher, its influence on the television broadcaster will be significantly bigger than the nominal shareholding would suggest," UOKiK said. "The agreement and the application for the approval of concentration shows that no vital decisions regarding Polsat will be possible without the approval of the future minority shareholder."
Axel Springer's spokesperson Edda Fels told Interfax Central Europe Friday the company would continue seeking UOKiK's approval of the deal.
"We need to further examine today's decision of the cartel office and will shortly decide how to proceed," Fels said. "We have no intention to discontinue the proceedings."