German mini-major Kinowelt has gained a new long-term investor after Munich Re Insurance Group's acquisition of 1.2m shares - equivalent to 4.9% of the media concern's capital stock.

The shares were bought from Kinowelt founders Michael and Rainer Koelmel. According to an adhoc announcement, the proceeds from the sale will be made available to Kinowelt via a shareholder loan.

The Koelmel family intends to top up its shareholding correspondingly later in the year through a convertible bond issue or via a capital increase. The announcement emphasised the Koelmels' "long-term commitment to the business".

Initial stockmarket reaction in Frankfurt to the move saw Kinowelt's shares climb 28.05% to Euro21. Like other German entertainment companies, Kinowelt has seen its share price plummet, with the company's stock falling 67% in six months.

"With these newly available funds, the Kinowelt Media Group wants to use the current consolidation phase in the media sector to continue to expand its market position", the announcement added.

The move comes after Kinowelt offloaded 926,000 Class B non-voting shares in Canadian media concern Alliance Atlantis in October, capitalising on a rise in Alliance's stock price.

(See for seperate story on fall in German stocks).