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The Mohn familiy strongly supports the buyback, since it guarantees the company's independence and its long-term and sustainability and ensures a high degree of entrepreneurial freedom to the management.

GERMANS BUY BACK 25% STAKE FROM GBL

Thielen and Mohn Missive Reiterates Plans to Sell BMG Music Publishing
Bertie been berry busy.

Just a day after Sony BMG Music Entertainment head Rolf Schmidt-Holtz cleaned house at the Sony Music portion of the company, Bertlesmann announced they have reached an agreement “in principle” with Groupe Bruxelles Lambert SA to buy back its 25.1% stake in the company for $4.5b Euros and keep the company private.

In a letter to the company, Gunter Thielen and Liz Mohn stated: “The price is reasonable, taking into account the strong current trading as well the positive outlook for next years.  

The Mohn familiy strongly supports the buyback, since it guarantees the company's independence and its long-term and sustainability and ensures a high degree of entrepreneurial freedom to the management.

During the past years Bertelsmann experienced significant growth. A number of investments further enhanced the strong competitive position of all the divisions; we are improving our margins to reach our target of 10% return on sales by 2007. Your contribution to this performance is of essence. As part of 90,000 employees globally you have every reason to be proud of this.

The buyback will be financed through a bridge loan provided by several banks. This loan will be reduced over the next 12 to 18 months by retained cash flow from current operations as well as by expected proceeds from the planned divestiture of BMG Music Publishing. The process for the planned divestiture will start in June.

Bertelsmann will continue to apply a restrictive dividends policy. This will help us to continue to invest to grow our business.

Our company is in a strong position to face the future. Shareholders, management and employees have a common strategy which we will implement on the basis of a proven corporate culture.”


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