LIBERTY SURF GETS ACQUISITION HAPPY
Byline: Katherine Weisman
PARIS — Liberty Surf is out to catch more than a few waves.
Freshly loaded with $520 million from this month’s public offering, the free Internet-access provider is promising a slew of acquisitions — possibly one per week — said its president, Pierre Besnainou.
Besnainou made the declaration Wednesday after announcing the latest buy: a 35 percent stake in Cyber Press Publishing, for $37.3 million, in what is being dubbed “a long-term partnership.” Dollar figures are converted from francs at current exchange rates.
Cyber Press is the publisher of paper and electronic magazines focused on entertainment and video games, targeting readers 15 to 35 years old. Most of the group’s titles are accompanied by CD-ROMs, and the company also operates the Loisir.net portal. Last year, Cyber Press, which is publicly quoted on France’s Nouveau Marche, had sales of $17.8 million.
Liberty Surf — which is 38 percent-owned by Europ@web, the Internet investment company of French luxury titan Bernard Arnault, and 38 percent-owned by U.K. retailer Kingfisher PLC — explained in a statement that it would acquire the minority stake through a two-step capital increase that Cyber Press reserved for Liberty Surf. In a deal valuing Cyber Press at roughly $100 million, Liberty Surf will get a 15.9 percent stake in a new share issue and will attain the remainder in equity warrants.
The deal will enable both companies to explore numerous synergies, Liberty Surf said. For example, Liberty Surf will be able to tap into a new network of 20,000 addresses enjoyed by Cyber Press titles. Liberty Surf will be able to offer its free Internet access via the four million CD-ROMS that are distributed by Cyber Press.
The move by Liberty Surf into Cyber Press is coupled with a shareholders’ agreement that, among other things, guarantees that Liberty Surf’s holding will not be diluted before the 35 percent stake is sealed. The agreement also obliges Liberty Surf to maintain that stake for 24 months, explained Cyber Press managing director Philippe Deleplace.
Liberty Surf could have a seat on the board of Cyber as well as Loisir.net, if it wants. Each company also holds a preemptive right over the other’s shares and neither can leave the partnership without notifying the other.