[A-List] Germany: Deutschland AG closes ranks

["Michael Keaney" <michael.keaney@xxxxxx>]

Friede Springer gains control
By Bertrand Benoit in Frankfurt
Financial Times; Oct 10, 2002

Friede Springer, the largest shareholder in Axel Springer, yesterday secured
her grip on Europe's largest publisher by raising her stake in the group
above 50 per cent, gaining an absolute majority of the votes.

Mrs Springer, who previously held an indirect 45 per cent, bought an
additional 10.4 per cent stake from Deutsche Bank, just one day after the
bank had seized Leo Kirch's 40.3 per cent holding in Springer as security
for an unpaid loan.

Although no terms or financing details were disclosed, people close to the
bank said Mrs Springer had paid between ?185m and ?190m ($181m-$186m),
valuing the shares slightly above the ?667.3m paid by the bank for the 40
per cent stake on Tuesday.

The deal marked a decisive victory for Mrs Springer in the protracted battle
for control of the publisher that broke out with the death of her husband,
founder Axel Cýsar Springer, in 1985.

Mr Kirch, the Bavarian magnate whose media empire collapsed into bankruptcy
this year, sought to amass a majority stake after Mr Springer's death, but
never managed to gather more than his 40 per cent.

This holding nevertheless earned him a seat on the supervisory board, which
he used as a platform recently to accuse Mathias Dýpfner of causing the
collapse of Kirch Gruppe by exercising a ?767m "put" option against it in
January.

Yesterday's move also strengthened Mrs Springer's hand in a dispute with her
late husband's grandchildren, Axel-Sven and Ariane Springer, who together
hold 5 per cent in the publisher.

The two have been fighting for strategic influence and threatened to
withdraw their holding from a pooling vehicle, a shareholding structure that
had allowed Mrs Springer to control their voting rights.