EM.TV Board Chief Rejects Pressure to Quit

The supervisory board chief of troubled German media group EM.TV & Merchandising has told a newspaper he will not resign, despite pressure for him to do so from the Kirch group which is in talks to rescue EM.TV.

A source with knowledge of the talks told Reuters on Friday that Kirch is only prepared to buy a stake in EM.TV if Nickolaus Becker, EM.TV's supervisory board chief, leaves the company.

But in a pre-released story from Sunday's Welt am Sonntag, Becker said: "I am to blame for nothing and therefore resignation is not an issue for me."

Becker added that Kirch group head Leo Kirch had asked him on December 3 to stay on as supervisory board chief should an agreement be reached between the two companies.

An EM.TV spokesman on Saturday declined to comment directly on the issue of Becker's future.

"(EM.TV Chief Executive) Thomas Haffa and (Kirch Deputy Chief Executive) Dieter Hahn are negotiating. Everything else is speculation," the spokesman said.

A Kirch spokesman added: "We don't comment on speculation about personnel."

Under the terms of a deal announced on December 4, Kirch is to take a 16.74 percent stake in EM.TV and buy almost half of EM.TV's 50 percent stake in Formula One holding company SLEC.

The deal was agreed following a sharp fall in the share price of EM.TV, once a star of the Frankfurt stock exchange's Neuer Markt. The stock ended Friday's session at 5.0 euros, 96 percent off its February 2000 all-time high of 120 euros.

Growing Uncertainty

But the deal has been marked by growing uncertainty, and the source close to the talks told Reuters that it would take a change of key personnel at EM.TV to restore Kirch's confidence.

The source said that Kirch regarded EM.TV's current management under CEO Haffa as being barely able to manoeuvre at present.

EM.TV slashed its 2000 sales and earnings forecasts on December 1 despite having said in October that its targets were not under threat.

Analysts have said EM.TV, which distributes films and last year bought the rights to the Muppets, could start talks with third parties.

The EM.TV spokesman said: "We want to bring the deal with Kirch to a close. But naturally that does not prevent others from making us offers."

Becker was quoted in the Welt am Sonntag story as saying that Kirch was "our natural partner, we have known each other for decades, but managers would be bad managers if they had no alternatives."

The Wall Street Journal Europe said in its Friday edition that Becker and Kirch Deputy CEO Hahn have clashed over the terms of Kirch's bid. Becker is pushing for a better price than Kirch has offered for the Formula One stake, it said.