Endemol Entertainment, the Dutch TV production giant responsible for the worldwide Big Brother phenomenon, has sold its 25% stake in Helkon Media, setting the German producer-distributor free to pursue its own international expansion.
Endemol said the move was part of a "strategic reorientation" of its activities that would focus the group more on its Television Production and Endemol.com operations and away from handling third party content as a licence trader. The company recently sold its international television distribution arm to Toronto-based CanWest Entertainment in a move it said was consistent with this strategy (Screendaily, July 28). It stressed that its decision to quit distribution was not connected to its takeover by Spanish telecoms and multimedia giant Telefonica.
"Distribution involves substantial investment with less potential reward than if cash had been put into our own productions," said Martin Hoogendijk, head of Endemol's investor relations.
Helkon's investor relations manager Anush Assodollahi said: "this is fantastic news for us. We have been able to sell the shares to investors who understand and go along with our strategy."
Helkon's management today bought up the 2.64 million shares that Endemol was selling and quickly placed some 2.1 million with institutional investors. The placing price has not been disclosed but is understood to be an average of the market price over the last 30-40 days. The company founders paid the same price as they increased their stake to 37%.
Endemol owned a controlling 51% stake in Helkon until the German company floated on the Neuer Markt in October 1999, diluting its share to 25%. "Endemol provided us with a lot of cash two and a half years ago enabling us to buy some A-Class product, but the strategy and building work has been ours. In the next few months we look forward to proving that we can continue to do this on our own, without the perceived security of a big group behind us. We are grown ups and can look after ourselves," said Assodollahi.
Helkon has been expanding aggressively, particularly in the US where it recently took majority control of film finance boutique Newmarket Capital Group (Screendaily, May 30). It also launched an international sales arm - Helkon International Pictures - at Cannes which has built up a network of European distribution partners including Eagle Pictures in Italy, Tri Pictures in Spain and Redbus Film Distribution in the UK.
Hoogendijk said that having got out of distribution Endemol will now seek to build up its international production activities either through directly controlled operations or via a network of international joint ventures. This week Endemol formed a 50:50 joint venture with Australia's Southern Star to produce light entertainment and infotainment for the Australian and New Zealand markets.
"They are one of the few companies that are currently producing programmes that actively demonstrate media convergence," said Southern Star executive chair Neil Balnaves. "Big Brother is a format that involves the internet, television and telephony. We believe that this is the way forward in light entertainment programming."
The joint venture will have access to Endemol's library of more than 300 light entertainment and infotainment formats, and gives Endemol exclusive worldwide rights to formats in this genre owned by Southern Star and the new entity.
Karsten Kastelan IN BERLIN and Sandy George IN SYDNEY contributed to this report