EM.TV's Becker Says Won't Block a Deal With Kirch

The supervisory board chief of German media group EM.TV & Merchandising said on Sunday he would not block a deal for cross-town peer Kirch to take a stake in EM.TV as the two companies appeared eager to reach an agreement.

A previously agreed upon deal was thrown into doubt on Friday, when a source told Reuters that Kirch was only prepared to buy a stake in its Munich neighbour if EM.TV supervisory board chief Nickolaus Becker left the company.

Becker told Reuters on Sunday he would not stand in the way of a deal with Kirch.

"If the last open issue is just me and otherwise a deal which satisfies the shareholders could be reached, then it definitely shouldn't fall through because of me," he said in a telephone interview.

Becker also issued a statement on Sunday in which he said he was not about to resign. But he added: "In general ... the future of the company, its workers and its shareholders is for me incomparably more important than holding onto my position."

Referring to the statement, he later told Reuters: "This is not a piecemeal retreat."

According to media reports, Becker intervened in the deal-making during the Christmas and New Year's period, while EM.TV Chief Executive Thomas Haffa was on holiday, and clashed with Kirch Deputy Chief Executive Dieter Hahn.

Kirch denied it was seeking Becker's resignation.

"As a future EM.TV shareholder with 25.1 percent (of the voting rights), we have no preferences for the position of supervisory board chairman," a Kirch spokesman said.

An EM.TV spokesman voiced the group's desire to find a fast solution to its problems and said Becker's resignation was not an issue.

"We want to bring the deal with Kirch to a close," he said, but added that this did not prevent other parties from making alternative offers to rescue EM.TV.

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. Kirch would also take 25 percent of the voting rights in EM.TV.

Will Becker Go?

Becker said he is not about to resign. "I have nothing to blame myself for and therefore resignation is not an issue for me," he said in the statement.

But the source said on Friday that Becker's position was under pressure from Kirch because he held the top supervisory job at EM.TV before and during the firm's reporting troubles.

EM.TV, which distributes films and last year bought the rights to the Muppets, slashed its 2000 sales and earnings forecasts on December 1 despite having said in October that its targets were not under threat.

The profit warning followed a sharp fall in EM.TV's share price. The stock closed on Friday at 5.0 euros, 96 percent off its February 2000 all-time high of 120 euros.

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

"Kirch is a natural partner for EM.TV," he added.

Troubles have rained down on EM.TV since its December profit warning. Regulators have begun a formal insider-trading investigation while shareholders have filed a slew of lawsuits accusing management of concealing its financial woes.

In addition, the Munich public prosecutor is conducting a separate probe into share dealings by EM.TV top managers including Chief Executive Thomas Haffa and his brother Florian, the group's former chief financial officer.

EM.TV has insisted that it always acted in good faith and on best information.

(Additional reporting by Alexander Huebner in Munich)