Permira cash-out as Premiere joins market

The London-based buyout firm has sold more than 40 percent of its interest in German cable TV firm Premiere through a 12x over-subscribed IPO.

Permira has reduced its stake in Premiere, the German pay-TV business, from 65 percent to 23.6 percent following a heavily oversubscribed IPO that valued the company at around €2.3 billion. At the close of the first day of trading yesterday, Premiere’s shares were up 14 percent at €31.8 from an issue price of €28.

Premiere said 713 institutional investors took up 70 percent of the offering of 42 million shares, while 117,000 retail investors accounted for the remainder. The offering was the largest ever by a German media company, and was seen by analysts as a vote of confidence in the German consumer market.

The company was acquired from stricken KirchMedia, the Kirch empire’s free-TV broadcasting and rights unit, in February 2003 by a Permira-led consortium that injected some €220 million of equity into the business. The deal saw Bayerische Landesbank and HypoVereinsbank acquired ten percent stakes, while Austria-based Bank für Arbeit und Wirtschaft (BAWAG) took 3.5 percent.

Munich-based Premiere, which posted losses of €1.3 billion in 2001, returned to the black last year when delivering pre-tax earnings of €83 million. The firm offers satellite pay-TV to 3.25 million households across Germany and Austria.

The investor consortium has committed to a six-month lock-up period for its remaining stakes in the Premiere, while the Premiere management team’s interest – which was 11 percent at the time of the acquisition – is locked up for a year.