Coup with uncertainties
The collapsed Jean-Frey deal between Ringier and BM still leaves many questions unanswered
The collapse of the Jean Frey deal between Ringier and BM still leaves many questions unansweredBy Daniel Schifferle Little is yet known about the intentions and plans of the new owners of Jean Frey AG
(see also interview on page 5). What is clear, however, is that the turnaround will radically change the future prospects of their titles.
If you employ investment bankers, you can turn everything upside down within a very short space of time. The Basler Mediengruppe (BM) has demonstrated this dramatically. However, its U-turn on the sale of Jean Frey AG has also earned it all-round criticism and it now has to put up with the accusation that it acted in bad style.
The fact is that the press putsch puts the opportunities and risks for Jean Frey AG in a completely new light. Ringier would have offered the titles a predictable structure, but instead is licking its wounds. This is the second time that Jean Frey AG has been snatched from under the nose of Switzerland's largest media company. And once again, it is investors who are taking the plunge. Back in 1987 it was Werner K. Rey who came up with the better offer, today it is the private bank Swissfirst.
The most important message of the hastily presented solution: everything is open again. As an independent publishing house, Jean Frey AG undoubtedly has a very different future ahead of it than could have been expected if it had merged with Ringier. However, it is still completely unclear where the journey with the new exponents Christoph Richterich (Chairman of the Board of Directors) and Filippo Leutenegger (CEO) will lead. Especially as both are newcomers to the publishing business.
Many questions remain unanswered for the time being
The most urgent question at the moment, the clarification of the uncertainty regarding investors, will remain unanswered for some time yet. The newly appointed Chairman of the Board of Directors does not intend to provide any information before April. And this despite the fact that the editors-in-chief of Jean Frey AG are also insisting in unison on immediate disclosure of the investors. The private equity deal must be completed first, as Richterich explains in an interview with WerbeWoche.
He is not worried that the image of Jean Frey AG could be tarnished by this consolation. "We've had very positive feedback from the market. It's largely the media professionals themselves who are still having problems with it at the moment," says Richterich.
Nevertheless, the press reports from last weekend raise some unpleasant or at least provocative questions. There are not only unanimous calls for transparency. Südostschweiz publisher Hanspeter Lebrument posed a legitimate question in the SonntagsZeitung: "I'm surprised that none of the major media houses have managed to conclude a contract with the Basel media group."
BM retains printing order for Weltwoche and TR7
Little is yet known about the plans of the newcomers at Jean Frey AG. So far, it is mainly the vows of the Chairman of the Board of Directors and the CEO that they will not tolerate any influence of any kind, political or otherwise. On the contrary, they are on the way to becoming a publishing house free of all ties. The disclosure of the investors will show whether this is actually the case.
The sure winner is the Basler Mediengruppe. It will now be paid a much higher price for Jean Frey AG. It could have expected an amount of around CHF 50 million from Ringier. Or even significantly less, after the due diligence revealed a hole in the pension fund of CHF 12 to 20 million. By contrast, the deal with Swissfirst looks much better: Even if CHF 20 to 30 million of the stated transaction volume of between CHF 90 and 110 million goes towards the capital increase and the pension fund hole also has to be plugged, more than CHF 60 million is still likely to flow to BM.
Another benefit for the Basler: they can keep the printing contract for TR7 and Weltwoche. In the case of Weltwoche, however, only as long as it is still a newspaper. This is because the Basel-based company would not be technically equipped for the magazine format.
Ringier will probably forego a lawsuit
It remains to be seen what Ringier will do about the accusation of breach of contract. Ringier spokesperson Fridolin Luchsinger says that a decision on whether or not to take legal action against BM will be made towards the end of this week. "Personally, I think they will refrain from doing so. Because a lawsuit won't get us the deal back," he explains. Richterich, for his part, clearly distances himself from the accusation of a breach of contract: "This is a problem between Ringier and the Basel media group. If there is a partial breach of contract, it certainly has nothing to do with us." A good understanding with Ringier and basically all media companies is very important to him. He will therefore seek talks on his own initiative in the near future.
(see also interview on page 5). What is clear, however, is that the turnaround will radically change the future prospects of their titles.
If you employ investment bankers, you can turn everything upside down within a very short space of time. The Basler Mediengruppe (BM) has demonstrated this dramatically. However, its U-turn on the sale of Jean Frey AG has also earned it all-round criticism and it now has to put up with the accusation that it acted in bad style.
The fact is that the press putsch puts the opportunities and risks for Jean Frey AG in a completely new light. Ringier would have offered the titles a predictable structure, but instead is licking its wounds. This is the second time that Jean Frey AG has been snatched from under the nose of Switzerland's largest media company. And once again, it is investors who are taking the plunge. Back in 1987 it was Werner K. Rey who came up with the better offer, today it is the private bank Swissfirst.
The most important message of the hastily presented solution: everything is open again. As an independent publishing house, Jean Frey AG undoubtedly has a very different future ahead of it than could have been expected if it had merged with Ringier. However, it is still completely unclear where the journey with the new exponents Christoph Richterich (Chairman of the Board of Directors) and Filippo Leutenegger (CEO) will lead. Especially as both are newcomers to the publishing business.
Many questions remain unanswered for the time being
The most urgent question at the moment, the clarification of the uncertainty regarding investors, will remain unanswered for some time yet. The newly appointed Chairman of the Board of Directors does not intend to provide any information before April. And this despite the fact that the editors-in-chief of Jean Frey AG are also insisting in unison on immediate disclosure of the investors. The private equity deal must be completed first, as Richterich explains in an interview with WerbeWoche.
He is not worried that the image of Jean Frey AG could be tarnished by this consolation. "We've had very positive feedback from the market. It's largely the media professionals themselves who are still having problems with it at the moment," says Richterich.
Nevertheless, the press reports from last weekend raise some unpleasant or at least provocative questions. There are not only unanimous calls for transparency. Südostschweiz publisher Hanspeter Lebrument posed a legitimate question in the SonntagsZeitung: "I'm surprised that none of the major media houses have managed to conclude a contract with the Basel media group."
BM retains printing order for Weltwoche and TR7
Little is yet known about the plans of the newcomers at Jean Frey AG. So far, it is mainly the vows of the Chairman of the Board of Directors and the CEO that they will not tolerate any influence of any kind, political or otherwise. On the contrary, they are on the way to becoming a publishing house free of all ties. The disclosure of the investors will show whether this is actually the case.
The sure winner is the Basler Mediengruppe. It will now be paid a much higher price for Jean Frey AG. It could have expected an amount of around CHF 50 million from Ringier. Or even significantly less, after the due diligence revealed a hole in the pension fund of CHF 12 to 20 million. By contrast, the deal with Swissfirst looks much better: Even if CHF 20 to 30 million of the stated transaction volume of between CHF 90 and 110 million goes towards the capital increase and the pension fund hole also has to be plugged, more than CHF 60 million is still likely to flow to BM.
Another benefit for the Basler: they can keep the printing contract for TR7 and Weltwoche. In the case of Weltwoche, however, only as long as it is still a newspaper. This is because the Basel-based company would not be technically equipped for the magazine format.
Ringier will probably forego a lawsuit
It remains to be seen what Ringier will do about the accusation of breach of contract. Ringier spokesperson Fridolin Luchsinger says that a decision on whether or not to take legal action against BM will be made towards the end of this week. "Personally, I think they will refrain from doing so. Because a lawsuit won't get us the deal back," he explains. Richterich, for his part, clearly distances himself from the accusation of a breach of contract: "This is a problem between Ringier and the Basel media group. If there is a partial breach of contract, it certainly has nothing to do with us." A good understanding with Ringier and basically all media companies is very important to him. He will therefore seek talks on his own initiative in the near future.
