In a significant development, Norwegian media group Schibsted has revealed plans to split its operations into two separate entities. The company’s main news-media business will be carved out and subsequently sold to its largest shareholder, Tinius Trust, in a lucrative deal worth 6.2 billion Norwegian kroner ($568.8 million). Meanwhile, Schibsted’s marketplaces business will continue to operate as a publicly listed company on the Oslo Stock Exchange.
The completion of this transaction, expected in the first half of 2024, will see cash proceeds from the deal being returned to shareholders. This strategic decision comes after an extensive financial and strategic analysis conducted by Schibsted, highlighting the immense value creation potential of their current core businesses, News Media and Nordic Marketplaces. The company believes that separating these entities will unlock their full potential, surpassing what they can currently achieve within the existing company structure.
Schibsted’s Deputy Chairman, Rune Bjerke, explains, “Both News Media and Nordic Marketplaces have demonstrated significant potential as stand-alone companies. By creating separate entities, beyond what they have accomplished thus far, we are confident in their ability to thrive independently.” This move aims to enhance the earnings visibility of the remaining Schibsted business and reduce its reliance on advertising revenue, which is known for its volatility, according to UBS analyst Jo Barnet-Lamb.
With this strategic split and sale, Schibsted is embarking on a new chapter that will allow each entity to focus on its core business operations and maximize its potential for growth. The future of Schibsted and its news-media operations look promising as they enter this exciting phase of transformation.
Schibsted: Consolidating its News-Media Business
Schibsted, a prominent player in the Scandinavian news-media industry, has recently made headlines with its NOK6.2 billion sales price for its business. This valuation exceeds Barnet-Lamb’s previous estimation of NOK4.7 billion for the same enterprise.
To streamline its operations, Schibsted has agreed to eliminate its dual-class share structure as part of this deal. As a result, Class A shareholders will receive compensation for any loss in the premium value associated with these shares when compared to B shares.
Barnet-Lamb, a respected industry expert, commented, “The proposed collapse of the dual-share structure should migrate all trading volume through one single line, which would significantly improve the overall liquidity of the group. Historically, addressing this issue has been a concern for some investors, so this change is highly beneficial in our view.”
It is worth noting that the Tinius Trust currently holds approximately 26.3% of Schibsted’s shares, and it will maintain its stake in the newly formed Schibsted company.
In 2019, Schibsted spun off its Adevinta online classified-advertising business. Recently, the company made headlines again by agreeing to sell 60% of its 28.1% stake in Adevinta to a consortium led by Permira and Blackstone for a staggering NOK24 billion. The remaining Adevinta shares will become part of an indirect parent company belonging to the consortium.
As of 0915 GMT, Schibsted’s A shares were trading at NOK308.50, marking a remarkable 13% increase, while the B shares also witnessed a significant surge of 12% to reach NOK292.60.