LONDON (Brand Republic) - Shares in EM.TV climbed 35% this morning to €9.8 (£6) on the news that German media group Kirch is to rescue its debt-ridden rival by taking a 16.75% stake in the company.
Kirch is also to take an additional 25% stake in Formula 1 holding company SLEC, which had originally been optioned by EM.TV, for $1bn (£691m) by the end of this month.
EM.TV’s troubles began after it bought the Jim Henson Company, home of The Muppet Show, last year for $680m (£470m). It then splashed out $1.65bn (£1.14bn) in cash and shares for its 50% share in SLEC.
Investors began to lose confidence when this spending spree was followed by a profits warning, accounting errors and insider-trading investigations.
The company’s share price fell 90% from last year’s peak of €120 (£75.39) on Germany’s Neuer Market. It closed yesterday at €7.25 (£4.55), down 8.8%, before the agreement had been finalised.