Orkla Loans Montgomery €137 million So He Can Close The Deal

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	Orkla Loans Montgomery €137 million So He Can Close The Deal It has to be one of the strangest newspaper purchase deals of all-time. David Montgomery had trouble coming up with all the financing necessary to buy the Orkla group of newspapers, so Orkla lent him what he couldn’t come up with himself in order to close the deal. follow-up to: There’s A New European Media Baron – the UK’s David Montgomery -- and Like Media Barons Before Him He Is Judged On His Past Which Is Why Journalists In Germany, The Netherlands, and Now Norway and Denmark Are Not Happy - July 3, 2006 Like a bolt out of nowhere, David Montgomery’s Mecom Group has within less than a year established itself as a major European newspaper player. It’s newest target in what really looks like a reverse takeover, is buying Norway’s Orkla media empire for some €900 million in a deal set to close this month, assuming the politicians don’t get involved, and that could still happen since the Norwegian Culture Minister says he is not happy. Montgomery is paying NOK 5 608 million (approximately €706 million) plus shares in Mecom worth £73 million (NOK 852 million, €107 million) and to complete the purchase price Mecom is taking a loan from Orkla worth £93,4 million (NOK 1 090 million, €137 million). The shares constitute a stake of 19.97% in Mecom and Orkla will appoint one director to the Mecom board. The signed deal should be effective in September. Bjørn Wiggen, Managing Director of Orkla Media, will become CEO of Mecom Europe. The deal almost fell through a week ago when Montgomery came up short in his financing. The problem seemed to be the valuation of some of Orkla’s Danish newspapers plus how competitive that market is with several investment houses apparently turning away from the deal. Montgomery issued a statement saying, “The acquisition of Orkla Media is a major milestone in the development of Mecom as a leading European newspaper publishing group.”- July 27, 2006 Keywords:Mecom,media finance
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