July 4 (Bloomberg) -- Central European Media Enterprises Ltd. rose the most in five months after the company’s largest shareholder, Time Warner Inc., raised its stake to 49.9 percent.
The Bermuda-based operator of television channels in central and eastern Europe, known as CME, gained 9 percent to 109.85 koruna in Prague, the steepest rally since Feb. 3.
CME issued about 875,000 Class A shares to Time Warner for $90.8 million, exercising a put option under an agreement dated April 30, the company said in a statement late yesterday. The funds will be used to repay a part of its debt, CME said. Time Warner previously provided a $300 million loan to CME.
Time Warner obtained the additional shares for a price 50 percent higher than the current market price, J&T Banka AS said in a research note dated today.
“Taking into account another stake increase by the major shareholder and the purchase of shares high above the market price, we consider the news strongly positive,” J&T Banka said. “We expect a positive market reaction.”
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