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Axel Springer, KKR in talks to split media empire
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German billionaire Mathias Döpfner and private equity group KKR are in talks to spin off media conglomerate Axel Springer in a deal that would separate the group’s media assets from its digital classifieds operation.
Under the split being discussed, Axel Springer Chief Executive Döpfner and Friede Springer, the widow of the company’s founder, would take greater control of the group’s media properties, according to four people with knowledge of the matter.
These include the American news websites Politico and Business Insider, and the German publications Bild and Die Welt.
KKR and Canada Pension Plan Investment Board, which together hold the largest stake in Axel Springer, would take control of its portfolio of classifieds sites, including job board StepStone and real estate listings unit Aviv, the people added.
The potential split comes as Döpfner has been ramping up his efforts to build influence in U.S. media. In 2021, Axel Springer acquired Politico for $1 billion in its largest acquisition ever.
The company also tried unsuccessfully to buy the Financial Times in 2015.
Axel Springer’s classifieds business is growing faster and more profitable than its media business, two of the people said.
They added that taking control of the unit could help pave the way for KKR to begin exiting its investment five years after partnering with Döpfner to take Axel Springer private.
However, people cautioned that there was no guarantee of a deal.
Some people said that because the classifieds business is likely more valuable than news publishing, Döpfner’s camp could also get cash or a minority stake in the KKR-controlled business. However, they added that such details have not yet been worked out.
A deal could also pave the way for Döpfner to pursue more acquisitions. People familiar with the billionaire former music journalist’s thinking say he has expressed interest in buying the Wall Street Journal, currently owned by Rupert Murdoch’s News Corp, if it were put up for sale.
Axel Springer spokesman Adib Sisani said the company does not comment on “market rumors.” He added that “all shareholders are highly satisfied with Axel Springer’s progress since its delisting in 2019.”
KKR said: “We do not comment on market speculation,” adding that they “believe in the continued success and growth” of Axel Springer.
KKR agreed to pay nearly €3 billion — at a premium of nearly 40 percent — in 2019 for a large minority stake to partner with Döpfner and delist Axel Springer. It later sold some of its shares to CPPIB, which currently holds a 12.9 percent stake in the company.
KKR and CPPIB, which together own 48.5 percent of Axel Springer, cannot make decisions without Döpfner because of his special governance rights. Döpfner holds about 22 percent of the equity but has voting rights equivalent to twice that stake.
Last year, Axel Springer cut jobs across its German media operations and closed a number of regional offices, even paid dividends of more than €750 million over the last four years.
Axel Springer was planning an initial public offering for the employment platform StepStone, hoping to secure a valuation of up to €7 billion for the unit. But that failed to materialize amid a dramatic slowdown in European listings.
The deal talks come as Axel Springer is embroiled in a feud with hedge fund boss Bill Ackman. In January, Ackman threatened with legal action against the company and Business Insider in an escalation of a bitter fight over plagiarism allegations against the billionaire’s wife.
One internal review by Axel Springer found that Business Insider’s reporting on plagiarism allegations against academic Neri Oxman was accurate and “well documented.”