News Corp yesterday denied reports that it is planning a hostile takeover approach for Germany's Kirch group. But Kirch's problems increased when the Dresdner Bank group called in $410m (DM900m) of loans.

Kirch is understood to be wallowing in nearly $3.56bn (Euros4bn) of debt, but Dresdner has said that it is unwilling to extend the repayment of the loan beyond the end of December. Neither the bank, nor Kirch, made any comment on the reason for or the impact of the loan recall.

It emerged on Monday night that Kirch has accelerated negotiations to sell off its 25% stake in Spanish broadcaster Telecinco. The other shareholders - Italian broadcaster Mediaset, Spanish newspaper group Correo and Dutch fund Ice Finance - have the first right of refusal on the holding. Previous talks are understood to have foundered on the issue of the price tag. The recent sale of a stake by Planeta valued telecinco at $3.3bn but a slide in valuations for media companies have pegged the price nearer to $1.8bn. However, if the other partners cannot agree, Kirch is free to sell the shares to outside investors.

Kirch held crisis meetings over the weekend in order to prepare its defences against what was assumed to be a hostile bid from the Rupert Murdoch controlled News Corp.

Although the two groups have been allied for many years, News Corp is clearly frustrated by the slow progress and mounting losses at KirchPayTV, in which it holds a 22% stake. In a recent results statement News Corp made it clear that it is considering exercising its option which would force Kirch to buy back the stake at a price close to $1.34bn (Euros1.5bn) next October. But in the same statement News also publicly aired the notion that Kirch may not have the financial resources to acquire the stake (Screendaily Nov 4).

Since then it was suggested that News Corp may be prepared to force the privately owned Kirch into a choice between liquidation and takeover.