Endemol buys time, rejects bid

Endemol has been allowed extra time to negotiate its debt restructure and has rejected Time Warner’s latest takeover bid.

The Big Brother superindie has been locked in crunch discussions with its lenders, which include a number of banks, for months but hasn’t come to an agreement on how to deal with its estimated €2.8bn (US$3.6m) debt.

The latest deadline passed yesterday but lenders agreed to waive loan terms until the middle of February. C21 understands they favour a debt-for-equity swap, which would cut the loans to about €550m, according to The Scotsman. Lenders have accordingly turned down Time Warner’s €1.3bn all-cash takeover bid submitted earlier this week – a revised offer on an initial approach made last month.

However, there are disagreements over the structure of such a move. Royal Bank of Scotland and Lehman Brothers and two of Endemol’s main shareholders – John de Mol-backed investment firm Cyrte and Goldman Sachs – are broadly in favour while Barclays and Mediaset are understood to be seeking better terms.

A source said: “Mediaset and Barclays are not aligned with what the rest are thinking.” But The Scotsman reported the pair does not have enough voting power to block such the restructure.

Silvio Berlusconi-owned Mediaset, Cyrte and Goldman Sachs bought Endemol from Spanish telecoms group Telefonica for US$3.5bn in 2007. They financed the deal with leveraged loans that saddled the company with debts, which it can no longer sustain under its current business model.