Bertelsmann shake-up will give "maximum flexibility"

A change in Bertelsmann’s legal structure will give the family business “maximum flexibility” to bring in outside investors, while allowing the Mohn family to retain control of the German media conglomerate, a company spokeswoman told CampdenFB. 

She was commenting after the business, which controls RTL TV, Random House books and publisher Gruner + Jahr, completed the switch from being a stock corporation – known as Aktiengesellschaft – to a partnership limited by shares, Kommanditgesellschaft auf Aktien. The family has become a general partner under a Societas Europaea set-up – a European limited company – with full control of the board. 

The move, which sees the company change its name to Bertelsmann SE & Co KGaA from Bertelsmann AG, could mean the Mohns can sell shares to external investors without losing control of the Gutersloh-based company.  

Asked how important control was for the Mohn family, the spokeswoman told CampdenFB: “It is important, otherwise we wouldn’t have done this [change].”

She added: “This change allows us maximum flexibility to determine the direction of the company.”

The family is known for its aversion to outside investors. In 2006, family member and vice-chairwoman Liz Mohn blocked a possible initial public offering. The family paid €4.5 billion for Belgian investor Albert Frere’s 25% stake, leading to large debts.

The media group is said to be looking for ways to raise billions of euros to pay off its debt, pegged at €4.9 billion, and fund acquisitions.

According to the spokeswoman, a management meeting in mid-September will likely resolve matters related to outside financing, including how many shares the Mohn family will sell to investors.

The company, which appointed non-family Thomas Rabe as chief executive in March, registered a slight increase in fiscal 2011 revenues to €15.3 billion from €15.1 billion the year before. It will announce its half-yearly results on 31 August.

“We are in the process of defining a new strategy with a new chief executive on board,” the spokeswoman added.