Kirch could be forced into takeover
LONDON - German media group Kirch may be forced to accept a takeover bid by Rupert Murdoch's News Corporation as reports indicate that its bankers are refusing to extend the company's credit.
Murdoch has been exploring exercising an option to sell back its 22% stake in the company's Premier World pay-TV business. However, debt-laden Kirch is thought to be unable to afford the stake, which could cost it as much as £1.25bn.
Murdoch is reported to be considering a takeover of the company, against which Kirch chairman Leo Kirch is said to be preparing a defence.
However, news reports this morning suggest that one of Kirch's lenders, Dresdner Bank, is demanding the repayment of a £310m loan by the end of the year.
Most of Kirch's loans are expected to be due during the first quarter of next year and many of the large German banks are said to be unlikely to extend credit further because of the current state of the economy.
Kirch Media recently reported debts of £2.75bn. However, it is not known how much debt its other divisions, Kirch Pay-TV and Kirch Beteiligung, which has stakes in print, film production and distribution, and music, film and film rights companies, are burdened with.
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