Advertisement

Company Town

Bertelsmann Looking Around for Acquisitions

September 28, 2001|JEFF LEEDS | TIMES STAFF WRITER

Bertelsmann Chairman and Chief Executive Thomas Middelhoff said Thursday that the German media company has more than $4 billion to spend and will look for potential acquisitions as rivals' shares fall.

Middelhoff disclosed the war chest in announcing the results of the privately held company's fiscal year, which ended in June. The company said net income rose 44% to $891 million, fueled by its majority stake in European broadcaster RTL Group.

The announcement stoked speculation that Middelhoff would attempt to buy British music giant EMI Group. EMI and Bertelsmann's music division, BMG, scrapped a merger plan this year in the face of opposition from European regulators.

The results come as Middelhoff is moving to stabilize management at BMG, which ranks third among the five major record companies in current-album sales in the U.S., according to SoundScan.

In November, Middelhoff ousted BMG's two top executives and announced a successor, who died unexpectedly. Middelhoff then tapped former television executive Rolf Schmidt-Holtz to run BMG. But two Schmidt-Holtz lieutenants departed the company six months after being hired.

Schmidt-Holtz laid off about 90 employees at BMG's Arista and RCA labels and closed RCA's urban-music department.

A Bertelsmann presentation Thursday showed that BMG accounts for almost one-fifth of the company's revenue but none of its profit. Executives said BMG posted a pretax loss of $4.6 million, excluding one-time charges, after generating pretax earnings of $206 million in the previous fiscal year.

Advertisement
Los Angeles Times Articles
|
|
|