Axel Springer CEO Mathias Doepfner and private equity firm KKR are in talks to break up the giant Berlin-based media conglomerate, according to a report in London newspaper The Financial Times.
Axel Springer’s brands include Politico, Business Insider, Bild and Die Welt. The company is pushing into artificial intelligence and recently announced a partnership with ChatGPT creator OpenAI.
The report said a potential deal would separate the group’s media assets from its digital classifieds operation.
KKR and Canada Pension Plan Investment Board (CPPIB), who together have the largest shareholding in Axel Springer, would take control of its portfolio of classifieds websites, including jobs platform StepStone and real estate ads unit Aviv, the report said.
A KKR spokesperson told Reuters “together we have made significant progress against Axel Springer’s digital and international ambitions, and believe in the continued success and growth of the business.”
KKR had become the biggest shareholder of Axel Springer in 2019 by taking a 43.54% stake for €2.9 billion.
Friede Springer, the widow of the company’s founder, along with Doepfner, would assume greater control of the group’s media properties, the report added.
A spokesperson for Axel Springer told Reuters that “all shareholders are highly satisfied with Axel Springer’s progress since its delisting in 2019,” but declined further comment.
Axel Springer’s classifieds business is faster-growing and more profitable than its media business, the report said.
Taking control of the classifieds business could help KKR to begin exiting its investment five years after it partnered with Doepfner to take Axel Springer private, the report said.
A deal could also pave the way for Döpfner to seek further acquisitions. He has expressed interest in buying the Wall Street Journal, currently owned by Rupert Murdoch’s News Corp, if it came up for sale.
KKR told The Financial Times: “We do not comment on market speculation”, adding that they “believe in the continued success and growth” of Axel Springer.
KKR agreed to pay nearly €3 billion — including a premium of close to 40% — in 2019 for a large minority stake to partner with Döpfner and de-list Axel Springer.
It later sold some of its shares to CPPIB, which currently holds a 12.9% stake in the company.
The Financial Times reported that KKR and CPPIB, which together own 48.5% of Axel Springer, cannot make decisions without Döpfner because of his special governance rights.
Döpfner holds about 22% of the equity but has voting rights equivalent to double this share.