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Premiere Shares Rise as New CEO Raises Takeover Speculation
By Phil Serafino
Sept. 11 (Bloomberg) -- Premiere AG, the German pay- television company partly owned by News Corp., rose the most in eight months in Frankfurt trading after the naming of a new chief executive officer increased speculation about a takeover.
Premiere climbed as much as 7.6 percent. CEO Michael Boernicke is being replaced by Mark Williams, News Corp.'s chief financial officer for Europe and Asia, Premiere said late yesterday. The company said last month its second-quarter loss widened on costs for a license to broadcast Germany's top soccer league, a higher tax charge and piracy.
Williams' appointment may lead to a financial turnaround at the company, and News Corp. may then increase its stake or make an offer for the rest of Premiere, Paul Reynolds, a Deutsche Bank analyst in London wrote in a report today. He raised his rating on the stock to ``buy'' from ``hold.''
``We have long argued News Corp. would one day bid for Premiere,'' Reynolds wrote. ``In putting their own man in charge of Premiere, they can conduct further due diligence, improve the operational performance of Premiere and perhaps most critically, control Premiere's Bundesliga football rights bid.''
Premiere shares rose 23 cents, or 1.9 percent, to 12.12 euros as of 10:37 a.m. in Frankfurt. The stock gained the most since Jan. 7, when News Corp. first announced it had acquired a stake in Premiere. Before today, the stock fell 7.8 percent this year, giving the Unterfoehring, Germany-based company a market value of 1.34 billion euros ($1.87 billion.)
Rupert Murdoch
News Corp., based in New York, bought 14.6 percent of Premiere in January, saying it anticipated ``enormous'' growth in the German TV market. The media company controlled by Rupert Murdoch increased its stake and now holds 25 percent of the pay- TV company's shares.
Boernicke, 47, has stepped down with immediate effect, citing personal reasons, Premiere said in a statement yesterday. News Corp. spokeswoman Teri Everett declined to comment when contacted by Bloomberg News.
Since the Christmas period, sales had been hurt by hackers exploiting a breach in its smartcard encryption system, Premiere said Feb. 6. The company said it has started swapping out smartcards of satellite customers and will complete the work by the end of this quarter, closing the security gap.
Williams is the ``right-hand man'' to James Murdoch, News Corp.'s CEO for Europe and Asia, Deutsche Bank's Reynolds said. Investors will expect Williams to generate margins of 15 percent to 20 percent on earnings before interest, tax and amortization, versus negative margins now, Reynolds said.
``New brooms sweep clean, that's what we've seen often,'' Fidel Helmer, head of equity trading at Hauck & Aufhaeuser in Frankfurt, said in a Bloomberg Television interview today. ``I could imagine that to be the case at Premiere as well.''
`Great Potential'
Boernicke, previously Premiere's chief financial officer, had been CEO since August 2007 when he succeeded Georg Kofler. Williams, the chief operating officer of News Corp.'s Sky Italia satellite-television unit, took up his role as CFO for Europe and Asia at the end of March. In April, Premiere named Williams as one of three additional supervisory board members.
``I am convinced of the great potential of pay-TV in Germany,'' Williams said in an e-mailed statement. ``I know this view is shared by News Corp.'' He said the new responsibility ``came unexpectedly.''
By Phil Serafino
Sept. 11 (Bloomberg) -- Premiere AG, the German pay- television company partly owned by News Corp., rose the most in eight months in Frankfurt trading after the naming of a new chief executive officer increased speculation about a takeover.
Premiere climbed as much as 7.6 percent. CEO Michael Boernicke is being replaced by Mark Williams, News Corp.'s chief financial officer for Europe and Asia, Premiere said late yesterday. The company said last month its second-quarter loss widened on costs for a license to broadcast Germany's top soccer league, a higher tax charge and piracy.
Williams' appointment may lead to a financial turnaround at the company, and News Corp. may then increase its stake or make an offer for the rest of Premiere, Paul Reynolds, a Deutsche Bank analyst in London wrote in a report today. He raised his rating on the stock to ``buy'' from ``hold.''
``We have long argued News Corp. would one day bid for Premiere,'' Reynolds wrote. ``In putting their own man in charge of Premiere, they can conduct further due diligence, improve the operational performance of Premiere and perhaps most critically, control Premiere's Bundesliga football rights bid.''
Premiere shares rose 23 cents, or 1.9 percent, to 12.12 euros as of 10:37 a.m. in Frankfurt. The stock gained the most since Jan. 7, when News Corp. first announced it had acquired a stake in Premiere. Before today, the stock fell 7.8 percent this year, giving the Unterfoehring, Germany-based company a market value of 1.34 billion euros ($1.87 billion.)
Rupert Murdoch
News Corp., based in New York, bought 14.6 percent of Premiere in January, saying it anticipated ``enormous'' growth in the German TV market. The media company controlled by Rupert Murdoch increased its stake and now holds 25 percent of the pay- TV company's shares.
Boernicke, 47, has stepped down with immediate effect, citing personal reasons, Premiere said in a statement yesterday. News Corp. spokeswoman Teri Everett declined to comment when contacted by Bloomberg News.
Since the Christmas period, sales had been hurt by hackers exploiting a breach in its smartcard encryption system, Premiere said Feb. 6. The company said it has started swapping out smartcards of satellite customers and will complete the work by the end of this quarter, closing the security gap.
Williams is the ``right-hand man'' to James Murdoch, News Corp.'s CEO for Europe and Asia, Deutsche Bank's Reynolds said. Investors will expect Williams to generate margins of 15 percent to 20 percent on earnings before interest, tax and amortization, versus negative margins now, Reynolds said.
``New brooms sweep clean, that's what we've seen often,'' Fidel Helmer, head of equity trading at Hauck & Aufhaeuser in Frankfurt, said in a Bloomberg Television interview today. ``I could imagine that to be the case at Premiere as well.''
`Great Potential'
Boernicke, previously Premiere's chief financial officer, had been CEO since August 2007 when he succeeded Georg Kofler. Williams, the chief operating officer of News Corp.'s Sky Italia satellite-television unit, took up his role as CFO for Europe and Asia at the end of March. In April, Premiere named Williams as one of three additional supervisory board members.
``I am convinced of the great potential of pay-TV in Germany,'' Williams said in an e-mailed statement. ``I know this view is shared by News Corp.'' He said the new responsibility ``came unexpectedly.''
