Radio Zet reshuffles owners to beef up and expand<BR>
The move comes as the radio sector looks increasingly set for heightened competition. In recent months, the largest private station, RMF FM, has also moved to restructure its shareholding structure so that it can possibly go out and raise capital. In addition, publishing house Agora, which has stakes in 11 radio stations, has gone public and said it would use part of the proceeds to beef up its presence in the sector.
Radio Zet's shareholding reshuffle saw the heirs of the station's founder, the wife and daughter of the late Andrzej Woyciechowski, sell down part of their majority stake. A portion of their shares were bought by existing strategic investor Europe Development International (EDI), venture capital fund Advent International and members of the station's management.
Radio Zet said the changes, especially the inclusion of Advent, would allow it to move into other media.
"Currently we are considering different multimedia investments," said Monika Bednarek, general manager of Radio Zet. "And here Advent can help us with both funding and analysis of our future businesses."
Advent, with $3.4 billion under management, is one of the largest private equity investment funds in the world. The firm has experience in a variety of media and is already present in Poland through an approximate 10% stake in U.S.-based @Entertainment, which owns digital platform Wizja TV and cable provider Polska Telewizja Kablowa (PTK).
"It is an investment fund that brings in all its expertise in management," Bednarek said. "We are building the strategy for the station for the future and we can use Advent's experience in that."
Bednarek would not elaborate on the type of expansion the station was considering other than to say that it would be in multimedia projects excluding print. "It rather won't be print media," she said. "But as far as any other media or multimedia go, we are pretty open."
So far, Advent has tiptoed into a role in the station. The fund took a 3.6% stake in Eurozet, the station's parent company, through a company called Kanoko, which bought a 9% stake in Eurozet. Kanoko is 60% owned by EDI and 40% owned by Advent or companies it controls, said Jean Christophe Lestra, managing director of EDI.
"We could use Kanoko for other investments as well," he added.
EDI, which is owned by France's Lagardere group, is a holding company for radio interests in Poland, Germany, the Czech Republic, Spain, Russia, China, Luxembourg, Turkey, South Africa and Hungary. It is a sister company of publishing and press distribution concern Hachette, which is also present on the Polish market.
Both EDI and Radio Zet said that Advent would give the station greater capital raising possibilities and access to expertise in other sectors.
"EDI has a lot of experience in managing radio stations across the region," said Katarzyna Robinski, president of Robinski & Associates, an investment bank and consulting company that advised Eurozet on the restructuring. "Advent on the other hand, has experience in finance management, including media other than radio.
"Attracting such an investor gives wider opportunities for the future," she added.
And although Advent's initial participation is limited, Robinski did not rule out the possibility of the fund taking a larger stake in the future.
"Currently we're working on the investment strategy and future moves will depend on that," Robinski said.
Media watchers were convinced that greater involvement on Advent's part was only a matter of time.
"Personally, I think that (assuming such a small stake) is just the first step toward larger involvement," said Andrzej Zarebski, a member of the National Radio and Television Council (KRRiTV). "I don't think the story ends here."
While bringing in Advent, EDI also beefed up its commitment to the station. EDI's Kanoko holding, coupled with the increase of its direct stake in Eurozet to 40% from 38%, brings its total stake in Radio Zet to 45.4%.
EDI, Kanoko and another company Manaco, which took a 5% stake in the station and is owned by four station managers, bought their shares from the Woyciechowski family. The family's holding was reduced to 46% from 62%. In addition, Woyciechowski's wife, Dorota Zawadowska-Woyciechowska, resigned as management board president and became chairman of Eurozet's supervisory board. The management board spot is currently vacant.
The value of the share sales was not disclosed. The station itself did not raise new capital through the transactions.
Competitors were not surprised by the restructuring or Radio Zet's intention to move into other ventures.
"It's not a secret that Radio Zet has been talking about expansion for a while," said Marek Michalski, deputy head of the local radio station division at Agora. "Getting a new investor may be a move in this direction."
Agora, which intends to list on the Warsaw Stock Exchange (WSE) later this month, plans this year to invest zl. 54.4 million ($13.8 million) from the proceeds of its initial public offering (IPO) in a variety of businesses including existing and five new radio stations.
Even if it moves into new media businesses, Radio Zet said it would continue to concentrate on its core radio business.
"Radio will for sure remain the core of our business," Bednarek said.
The station is currently in a fierce fight for the No. 1 position on the market with Krakow-based RMF FM. According to Osrodek Badania Opinii Publiczej (OBOP), Radio Zet attracted a 31.1% listenershare over the first week of March, while RMF FM attracted 37.5% over the same period.
But Radio Zet grossed more ad revenue in 1998 than RMF FM, according to OBOP. Radio Zet reported gross revenue, which does not account for discounts, of zl. 135.81 million ($34.8 million) in 1998, compared to zl. 130.09 million ($33.4 million) reported by RMF FM.
However, the situation changed early this year. During the first two months of 1999, Radio Zet reported gross revenue of zl. 11.78 million ($3.02 million) and RMF grabbed zl. 22.11 million ($5.6 million).
Radio Zet's shareholding reshuffle saw the heirs of the station's founder, the wife and daughter of the late Andrzej Woyciechowski, sell down part of their majority stake. A portion of their shares were bought by existing strategic investor Europe Development International (EDI), venture capital fund Advent International and members of the station's management.
Radio Zet said the changes, especially the inclusion of Advent, would allow it to move into other media.
"Currently we are considering different multimedia investments," said Monika Bednarek, general manager of Radio Zet. "And here Advent can help us with both funding and analysis of our future businesses."
Advent, with $3.4 billion under management, is one of the largest private equity investment funds in the world. The firm has experience in a variety of media and is already present in Poland through an approximate 10% stake in U.S.-based @Entertainment, which owns digital platform Wizja TV and cable provider Polska Telewizja Kablowa (PTK).
"It is an investment fund that brings in all its expertise in management," Bednarek said. "We are building the strategy for the station for the future and we can use Advent's experience in that."
Bednarek would not elaborate on the type of expansion the station was considering other than to say that it would be in multimedia projects excluding print. "It rather won't be print media," she said. "But as far as any other media or multimedia go, we are pretty open."
So far, Advent has tiptoed into a role in the station. The fund took a 3.6% stake in Eurozet, the station's parent company, through a company called Kanoko, which bought a 9% stake in Eurozet. Kanoko is 60% owned by EDI and 40% owned by Advent or companies it controls, said Jean Christophe Lestra, managing director of EDI.
"We could use Kanoko for other investments as well," he added.
EDI, which is owned by France's Lagardere group, is a holding company for radio interests in Poland, Germany, the Czech Republic, Spain, Russia, China, Luxembourg, Turkey, South Africa and Hungary. It is a sister company of publishing and press distribution concern Hachette, which is also present on the Polish market.
Both EDI and Radio Zet said that Advent would give the station greater capital raising possibilities and access to expertise in other sectors.
"EDI has a lot of experience in managing radio stations across the region," said Katarzyna Robinski, president of Robinski & Associates, an investment bank and consulting company that advised Eurozet on the restructuring. "Advent on the other hand, has experience in finance management, including media other than radio.
"Attracting such an investor gives wider opportunities for the future," she added.
And although Advent's initial participation is limited, Robinski did not rule out the possibility of the fund taking a larger stake in the future.
"Currently we're working on the investment strategy and future moves will depend on that," Robinski said.
Media watchers were convinced that greater involvement on Advent's part was only a matter of time.
"Personally, I think that (assuming such a small stake) is just the first step toward larger involvement," said Andrzej Zarebski, a member of the National Radio and Television Council (KRRiTV). "I don't think the story ends here."
While bringing in Advent, EDI also beefed up its commitment to the station. EDI's Kanoko holding, coupled with the increase of its direct stake in Eurozet to 40% from 38%, brings its total stake in Radio Zet to 45.4%.
EDI, Kanoko and another company Manaco, which took a 5% stake in the station and is owned by four station managers, bought their shares from the Woyciechowski family. The family's holding was reduced to 46% from 62%. In addition, Woyciechowski's wife, Dorota Zawadowska-Woyciechowska, resigned as management board president and became chairman of Eurozet's supervisory board. The management board spot is currently vacant.
The value of the share sales was not disclosed. The station itself did not raise new capital through the transactions.
Competitors were not surprised by the restructuring or Radio Zet's intention to move into other ventures.
"It's not a secret that Radio Zet has been talking about expansion for a while," said Marek Michalski, deputy head of the local radio station division at Agora. "Getting a new investor may be a move in this direction."
Agora, which intends to list on the Warsaw Stock Exchange (WSE) later this month, plans this year to invest zl. 54.4 million ($13.8 million) from the proceeds of its initial public offering (IPO) in a variety of businesses including existing and five new radio stations.
Even if it moves into new media businesses, Radio Zet said it would continue to concentrate on its core radio business.
"Radio will for sure remain the core of our business," Bednarek said.
The station is currently in a fierce fight for the No. 1 position on the market with Krakow-based RMF FM. According to Osrodek Badania Opinii Publiczej (OBOP), Radio Zet attracted a 31.1% listenershare over the first week of March, while RMF FM attracted 37.5% over the same period.
But Radio Zet grossed more ad revenue in 1998 than RMF FM, according to OBOP. Radio Zet reported gross revenue, which does not account for discounts, of zl. 135.81 million ($34.8 million) in 1998, compared to zl. 130.09 million ($33.4 million) reported by RMF FM.
However, the situation changed early this year. During the first two months of 1999, Radio Zet reported gross revenue of zl. 11.78 million ($3.02 million) and RMF grabbed zl. 22.11 million ($5.6 million).
