Takeover renegotiated

Alan Heath
opublikowano: 19-09-2002, 00:00

The aquisition of outdoor company Art Marketing Syndicate by media empire Agora was one of the best known corporate take overs this year in this country. Questions were asked in parliament and the whole deal was surrounded in publicity, perhaps not surprisingly as this is what both companies specialise in. However no sooner did the long fought out deal come to a close as Agora decided it wanted to renegotiate the terms. Yesterday BB Investments, the main shareholder of AMS, agreed to increase the capital of AMS, pay its debts and buy an expensive advertising campaign with the company. As a result BB Investments is going to find itself PLN42m worse off.

The renegotiated deal was of no surprise to the market. Agora had been making noises about the changing the terms of its purchase of Art Marketing Syndicate (AMS) for some time. Agora used its own publication, the best selling Gazeta Wyborcza to announce that it would offer PLN44 and not PLN46 in a call to buy AMS shares. The original deal would have cost Agora PLN172.5m whereas the new proposal will cost PLN165.5m.

BB Investments will increase the capital of AMS by PLN24m in two phases. The first PLN14m tranche is due by 16 December and the second PLN10m in March.

BB Investments has also agreed to pay the PLN11.5m debts of AMS and its subsidiary Adpol. The advertising campaign will cost a further PLN7m.

Analysts have suggested that Agora may have threatened to pull out of the deal altogether and thus BB Investments were pushed into a corner and had no choice but to accept these conditions which are a reflection of current market conditions and the worsening results of AMS. BB Investments must be furious at the turn of events. Last year the French JC Deacux offered them PLN70 per share for AMS. The Poznan based fund then decided that this offer was too small.

It is even possible that the deal will not go ahead. BB Investments is going to have to prove that it has the cash to increase the capital of AMS and pay its debts. And it is going to have to prove it today.

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