RTL Shares Decline With Frankfurt Debut After Bertelsmann Sale

RTL Group SA (RTL), Europe’s biggest broadcaster, fell on its first day of trading in Frankfurt today and after owner Bertelsmann SE sold a 17 percent stake to fund acquisitions and accelerate growth.

Bertelsmann, Europe’s largest media company, raised 1.4 billion euros ($1.8 billion) after selling 25.5 million RTL shares at 55.50 euros apiece, it said yesterday. The sale reduced its holding in the Luxembourg-based broadcaster to 75.1 percent from 92.3 percent, assuming full placement of an over- allotment option. RTL’s stock dropped 2 percent to 55.40 euros at 9:41 a.m.

For RTL, a listing in Germany -- its biggest market -- means getting better access to shareholders. Bertelsmann Chief Executive Officer Thomas Rabe plans to spend as much as 3 billion euros on acquisitions over three years as the Guetersloh, Germany-based company seeks to reduce its reliance on Europe and traditional media outlets.

“Bertelsmann’s stake reduction is a positive,” Ian Whittaker, an analyst at Liberum Capital in London, said in a note. “By taking its stake down to 75 percent, RTL will now have a credible free float size of around 2.2 billion euros, which will increase its appeal to investors.” Liberum raised its recommendation on RTL to buy from hold.

‘X Factor’

RTL’s shares traded at a price-to-earnings ratio of 14.3, compared with ProSiebenSat.1 Media AG’s 18.4 and Modern Times Group AB’s 13.3. The stock is also listed in Luxembourg.

“Our goal is to make Bertelsmann a faster growing, more digital and more international company in the years ahead.” Rabe said in a statement.

Revenue at RTL, which produces TV shows including “American Idol,” “The X Factor” and “Family Feud,” rose 4 percent last year to a record 6 billion euros.

Germany’s benchmark DAX Index gained 16 percent in the 12 months through yesterday and was trading close to its highest level in more than 5 1/2 years.

Deutsche Bank AG (DBK), Germany’s biggest lender, said yesterday it will raise as much as 4.8 billion euros by selling shares and subordinate instruments in order to strengthen its capital ratios. Daimler AG (DAI) this month sold its remaining 7.5 percent stake in Airbus SAS parent European Aeronautic, Defence & Space Co. for 2.2 billion euros to focus on its car and truck businesses.

To contact the reporter on this story: Cornelius Rahn in Berlin at crahn2@bloomberg.net; Adam Ewing in Stockholm at aewing5@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net

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