Turkey's Dogan Yayın to withdraw from media

Doğan Yayın Holding has announced that it will sell all of the companies in its media business, except for the Hürriyet daily, within three months in an attempt to survive crippling tax fines.

Turkey's Dogan Yayın to withdraw from media

World Bulletin / News Desk

The Doğan Holding conglomerate's media group, Doğan Yayın Holding (DYH), has announced that it will sell all of the companies in its media business, except for the Hürriyet daily, within three months in an attempt to survive crippling tax fines.

In an interview with Reuters on Monday, DYH Vice Chairman Soner Gedik said that a shortlist for the sale of assets would be ready in a month and that the newspaper Hürriyet would not be included in this first group of assets. Goldman Sachs is advising on the sale.

In an earlier interview with Bloomberg on Sunday, when Gedik mentioned the sale of the DYH companies the public took this as a declaration of total withdrawal from the media. Gedik then spoke with Reuters to confirm that Hürriyet would not be included in the sell-off.

“Both strategic and private equity investors are among the potential bidders, who are all foreign-based,” Gedik was quoted as saying in report on Sunday by Bloomberg. He added that the company has asked investors for bids and a final shortlist of potential buyers will be ready in a month.

DYH was considering all options, he said, including strategic partnerships, and Hürriyet newspaper could be a candidate for such a partnership.

Upon the release of this news Hürriyet Gazetecilik shares suffered a 7 percent drop in the early session to TL 1.84 on the İstanbul Stock Exchange (İMKB), while investor demand drove Doğan Yayın shares 1.1 percent higher upon prospects that these companies will be saved from the troubled Doğan administration.

"Hürriyet not being on this first list does not mean it will never be included in the sale process, but it has been perceived negatively," Bülent Yurdagül of HSBC Investment said. "We were unsure whether or not it was included in the first list. Now that we've learned it won't be included, there may be a negative reflection on the shares," he added.

DYH has a number of newspapers including Posta, Hürriyet, Milliyet, Radikal, Fanatik and Hürriyet Daily News as well as Kanal D, Star and CNN Türk TV stations and a couple of magazines.

According to Bloomberg, RTL Group S.A., KKR & Co. LP, TPG Capital and Time Warner Inc. are among companies interested in buying DYH's media outlets. The company confirmed in October that it had received bids for its units and said an offer from Rupert Murdoch's News Corp was too low.

DYH has been under the spotlight for irregularities in its accounts and following a series of investigations auditors from the Ministry of Finance ruled the group had to pay TL 4.8 billion in outstanding taxes and fines. The company appealed the fines and following three different court rulings, Doğan was charged with TL 2.2 billion of this amount. Taking interest into account the total amount is over TL 3.5 billion.

DYH assets have a total value around $2 billion.

Last Mod: 13 Aralık 2010, 17:54
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