UPDATE 3-Endemol debt deal to see lenders take control
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UPDATE 3-Endemol debt deal to see lenders take control

www.reuters.com   | 19.01.2012.

* Endemol outperformed budget with 10 percent growth in 2011 (Adds Mediaset statement)
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* Paves way for lenders to take over Big Brother firm

* Endemol outperformed budget with 10 percent growth in 2011 (Adds Mediaset statement)

LONDON, Jan 19 (Reuters) - Endemol, the TV production house behind Big Brother and Deal or No Deal, has reached an outline agreement on restructuring with more than two thirds of its lenders, who are set to take control in a debt-for-equity swap.

"We can now enter into the final part of the process ... a solution that puts Endemol on a strong financial footing for the future is now imminent," global president Marco Bassetti and finance director Just Spee said in a statement on Thursday.

The Netherlands-based company had rejected a 1 billion euros ($1.3 billion) bid from U.S. media group Time Warner, while shareholder Mediaset had presented its own plan for a joint bid with Italian fund Clessidra.

Endemol's business is based on formats including Changing Rooms and Ready Steady Cook which are sold in more than 100 countries around the world. It is also expanding its scripted programming business.

After a drop in earnings, Endemol failed to meet terms on the loans in 2011. Lenders have now agreed to cut their roughly 2 billion euros of loans to 500 million, split into a 400 million senior loan tranche and a 100 million junior tranche, a source close to the restructuring said.

In return, senior lenders will take pro rata ownership in Endemol's equity. Those senior lenders include shareholders -- U.S. investment bank Goldman Sachs, Italian media group Mediaset and investment firm Cyrte -- after they bought Endemol debt over the past two years. The three agreed to buy Endemol in 2007 for 2.6 billion euros ($3.3 billion).

For their debt holding they will receive a total of around 30 percent in the company's equity. Other lenders, including hedge funds Apollo, Providence Equity Partners, Royal Bank of Scotland and Lehman Brothers.


Mediaset welcomed the debt restructuring deal.

"The solution ... does not forsee a sale to third parties of the company and consequently Mediaset remains as the only media sector shareholder with all options about its future role (in Endemol) open," Mediaset said in a statement.

In November, a source said Mediaset had told Endemol it could review its commercial ties with the producer depending on the outcome of the restructuring. The source said Mediaset and its Spanish unit accounted for about a quarter of Endemol's core earnings.

"Endemol has not been a great adventure for Mediaset. But the financial impact will be negligible because it has already written down its stake," a Milan analysts said.

Endemol said on Thursday it had outperformed its budget in 2011 with growth of about 10 percent.

ABN AMRO, Barclays Capital, Credit Suisse , Goldman Sachs, Lehman, and Merrill Lynch arranged 2.2 billion euros of loans in 2008 to back Endemol's buyout, according to Thomson Reuters LPC data. ($1 = 0.7802 euro) (Reporting by Georgina Prodhan and Isabell Witt,; and Danilo Masoni in Milan; Editing by Hans-Juergen Peters, Dan Lalor and Jane Merriman)

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