Exhibit 99
SBS BROADCASTING CME
Central European Media
Enterprises Group
FOR IMMEDIATE RELEASE
SBS BROADCASTING (SBS) TO MERGE WITH
CENTRAL EUROPEAN MEDIA ENTERPRISES (CME) IN $615 MILLION
TRANSACTION
New SBS Platform Creates Europe's Largest Broadcaster Linking 13 Countries
All CME Shareholders to Receive 0.5 Shares of SBS Series A Common Stock Per
CME Share
LUXEMBOURG AND BERMUDA, March 29, 1999 -- SBS Broadcasting SA (SBTVF:
NASDAQ) and Central European Media Enterprises, Ltd. (CETV: NASDAQ) today
announced they have entered into a definitive agreement for the merger of CME
into SBS in an all stock transaction valued at $615 million based on today's
closing prices. The merger creates Europe's largest broadcaster in that it
encompasses 18 television stations and 12 radio stations in 13 countries,
serving a population exceeding 150 million. On a pro forma basis in 1998, the
companies produced $594 million in combined revenues and $64 million in station
operating cash flow from continuing operations.
Under the definitive merger agreement, which has been approved by the
boards of directors of both companies, CME shareholders will receive a fixed
exchange ratio of 0.5 shares of SBS Series A Common Stock for each CME share. On
a fully diluted basis, SBS will issue approximately 14.2 million new shares to
CME shareholders and option holders who will own approximately 33% of the
combined company. The merger, which is subject to customary approvals, will be
accounted for as a purchase by SBS and is intended to be tax-free to CME
shareholders.
The combined company, which will retain the name SBS Broadcasting SA,
will own interests in a diversified mix of television and radio broadcasting
assets in Europe's fastest growing markets. Major assets of the combined
companies include: Western European television stations SBS6 in the Netherlands,
Kanal 5 in Sweden, VT4 in Belgium, TvDanmark in Denmark and TVNorge in Norway;
and Central and Eastern European national television stations Nova TV in the
Czech Republic, TV2 in Hungary, PRO TV in Romania, POP TV in Slovenia, Markiza
TV in Slovakia and Studio 1+1 in Ukraine, all of which are market leaders in
their coverage areas. SBS also owns a stake in national Italian television
station Rete Mia and will launch in September the first national private
television station in Switzerland. SBS owns 12 radio stations, located in
Sweden, Denmark and Finland, all of which are market leaders. In addition, both
companies have formed strategic local partnerships and programming alliances in
each of their markets.
Harry Evans Sloan, currently Chairman and Chief Executive Officer of
SBS, will remain as Co-Chairman and CEO in the expanded SBS. Ronald S. Lauder,
currently Chairman of CME, will join SBS as Co-Chairman. Michael Finkelstein,
currently Vice Chairman of SBS, will become Chairman of the Executive Committee
of the Board, the other members of which will be Messrs. Sloan and Lauder.
Howard A. "Woody" Knight will continue in his current role of Vice Chairman and
Chief Operating Officer. Martin Lindskog, currently President of SBS, and Fred
Klinkhammer, currently President and CEO of CME, will serve with Mr. Knight in a
newly created Office of the President. The eleven member SBS Board will be
expanded to 15 members to include Messrs. Lauder and Klinkhammer and two
additional directors designated by CME.
Mr. Sloan commented, "This combination of assets will create one of the
fastest growing, largest and most unique broadcasting groups in the world. We
will operate a valuable portfolio of established and developmental franchises
that are second to none in Europe in terms of territorial reach and growth
potential. All 13 of our combined markets are growing significantly faster than
North America's more mature markets and faster than Europe as a whole. Given our
top management, proven strategies, bottom-line focus, expanded programming
resources and preeminent strategic local partners, it is difficult to imagine a
more attractive platform for a pan-European broadcaster.
"This is a great deal for SBS' shareholders and enhances our ability to
create extraordinary value. SBS' commitment to increasing shareholder value is
reflected in our nine consecutive quarters of substantially improved station
operating cash flow performance. We have a proven formula for building
successful broadcasting operations in newly commercialized markets. CME has
created considerable value within a very short time frame in Central and Eastern
Europe. CME stations are ranked number one in both audience and revenues in all
markets except Hungary where the SBS station, TV2, is number one. I recognize
that these achievements are due in large measure to CME's local partners and we
are looking forward to helping them further develop their market leading
positions. We had previously identified these markets as the logical next step
for SBS because of their dynamic growth potential. Combining the two companies
gives us unparalleled program buying power. This leverage, coupled with the
opportunity for much more efficient inventory utilization and other significant
operating efficiencies and cost savings, will drive improved bottom-line
performance. Together, we are poised to enter the next century and strategically
positioned to capitalize on the continuing growth of Europe's under-penetrated
advertising markets."
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Ronald S. Lauder, said, "In our media markets, we could not find a
better partner than SBS with which to join in order to take the company to the
next level. SBS' stations have similar characteristics to our own, including
blue chip local partners and strong ties to their local communities. The
managements of both companies share a demonstrated commitment to quality
programming and the development of profitable stations. We believe CME's
operating momentum will be greatly enhanced through the addition of SBS' proven
management resources.
"CME's market leading stations are uniquely positioned to benefit from
the ongoing economic and television advertising growth in the region. SBS'
success in developing profitable stations in more mature and more competitive
markets will greatly benefit our shareholders as we take our stations forward.
Together, we can improve our operating performance and translate the region's
growth into increased returns for our shareholders.
"On a personal note, I have known and admired Harry Sloan for some
time. I have watched with interest the successes he and his management team have
achieved. I am very committed to this transaction and I will assist the new
company in every way going forward. As a result of this merger, I will become a
major SBS shareholder and I intend to further increase my investment in the
combined company by purchasing a very substantial number of SBS shares in the
open market from time to time at prevailing market prices."
Woody Knight commented, "When I joined SBS more than three years ago,
we were a young company poised to deliver significant returns for our
shareholders. At that time, our senior management crafted an operating strategy
focused relentlessly on bottom-line results. Our successful execution of these
initiatives is demonstrated by our consistent and sustainable financial
performance. CME represents a collection of premium assets, offering superior
growth opportunities. Coupling those assets with SBS' best practices provides a
unique opportunity for improved margins and significantly improved cash flow. I
am looking forward to working with CME's President, Fred Klinkhammer. Fred is an
experienced and capable executive who shares our operating philosophy and he
will provide valuable continuity as we integrate these assets into the SBS
fold."
SBS was advised by Bear, Stearns & Co. Inc. in the transaction. Morgan
Stanley Dean Witter advised Central European Media Enterprises Ltd.
CME is the leading commercial television company in Central and Eastern
Europe, serving a population of over 100 million. The Company's national private
television stations and networks in the Czech Republic, Slovakia, Slovenia and
Ukraine hold the leading average
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nationwide audience shares in their markets and the Company's television network
in Romania holds the leading average audience share within its area of broadcast
reach. Central European Media Enterprises Ltd. is listed on the Nasdaq Stock
Market and trades under the symbol CETV.
SBS is a European television and radio broadcasting company with controlling
interests in eight television and twelve radio stations in Western and Central
Europe, serving a population of over 50 million. Countries where SBS currently
broadcasts include Sweden, Norway, Denmark, Belgium, The Netherlands, Hungary,
Finland, Slovenia and Italy. SBS is listed on the Nasdaq Stock Market and trades
under the symbol SBTVF.
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For further information, contact:
Press: Investors:
Ann Travers Diana Brainerd, Chris Plunkett, Michael
Brainerd Communicators, Inc. Smargiassi
212-986-6667 Brainerd Communicators, Inc.
212-986-6667
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