€2bn drop as Endemol lenders step in with swap

LENDERS to Endemol will take over the Dutch television show producer in a debt-for-equity swap, rejecting Time Warner’s latest €1 billion (£844 million) bid, sources yesterday claimed.

The deal will cut the Big Brother and Million Pound Drop producer’s €2bn of loans to around €550m, the sources said.

Two of the largest lenders, Royal Bank of Scotland and Lehman Brothers, and two shareholders – investment firm Cyrte and Goldman Sachs – have supported the move, ending a deadlock by getting two-thirds of lenders to agree to a deal.

Barclays and Endemol’s third-biggest shareholder, Italian broadcaster Mediaset, are holding out for better terms but do not have enough voting rights to block the restructuring, sources added. A spokesman for Endemol declined to comment.

Endemol’s equity would be split among lenders and existing shareholders, depending on the debt each party holds.

Existing shareholders would receive around 30 per cent, while the rest would be distributed among hedge funds and bank lenders, one of the sources said.

Lenders were set to extend a waiver of the covenant breach on Endemol’s debt until next year to finalise the restructuring, a source added.

Silvio Berlusconi’s Mediaset, Goldman Sach’s Capital Partners and Cyrte Investments bought Endemol in 2007 for €2.6bn. Barclays, Credit Suisse, Goldman Sachs, ABN Amro, Lehman and Merrill Lynch arranged €2.2bn of loans in 2008 to back the deal.