Failed FT bid shows Axel Springer caught between tradition and ambition
By Harro Ten Wolde and Klaus Lauer
FRANKFURT/BERLIN (Reuters) - Axel Springer's (SPRGn.DE: Quote) failure to clinch a deal to buy the Financial Times lengthens a line of setbacks in a decade-old quest by Germany's biggest news publisher to expand abroad.
Once again, cautious bidding practices cost it the prize, revealing a complex dynamic within the family-controlled company, which is best known for its Bild tabloid but which calls itself a digital powerhouse with international potential.
The last-minute loss to Japan's Nikkei of a newspaper Axel Springer had coveted for years was clearly a blow to its management, but for some investors it was a relief, and not just in hindsight.
"Worse than not expanding internationally would be Springer overpaying for an asset," one top 10 investor told Reuters. "In that respect, shareholders gave a clear signal last week."
Axel Springer shares dropped two percent on reports it was bidding for the FT, but recovered that loss and ended the day higher after the company said it would not buy it last Thursday.
Japan's Nikkei bought the premier business newspaper for $1.3 billion (1.18 billion euros) from Pearson (PSON.L: Quote), just 100 million euros more than Springer was prepared to spend, according to a person familiar with the talks. The company declined to comment.
Springer CEO Mathias Doepfner, a former journalist at Frankfurter Allgemeine Zeitung and editor-in-chief at Die Welt, had long expressed the wish to buy a big English-language title.
Two people familiar with the talks said ultimately, the price was too high for a company with a market capitalization of 5 billion euros, a conservative bidding strategy and aversion to debt. Continued...