Kinnevik sells TV1000

3/23/2000 4:04 PM

Industriförvaltnings AB Kinnevik's ("Kinnevik") wholly-owned subsidiary TV1000 Sverige AB ("TV1000") sells its entire operations to Modern Times Group MTG AB ("MTG"). The operations comprise the movie channel TV1000 and its sister channel TV1000 Cinema, which have been operated and distributed in the Nordic countries within the framework for MTG Viasat Broadcasting.
MTG has decided to exercise its option to acquire TV1000's operations from Kinnevik. Kinnevik wrote the option when shares in MTG were distributed to Kinnevik's shareholders in September 1997. Kinnevik had to retain
TV1000 owing to a dispute with minority shareholders at that time. During the interim, in accordance with a management agreement MTG has been in charge of the operations, which has been successful. From end-June 1997 to end-December 1999, the number of subscribers increased by 84%. The channel has yet to turn a profit, though.
The purchase price will be SEK 1,156 million which is equal to the fair market value. The consideration will be paid as 1,689,189 new shares in MTG: 422,297 MTG series "A" shares and 1,266,892 MTG series "B" shares. The strike price was calculated as the average closing price for MTG shares during the preceding 15 trading days. The total value corresponds to the purchase price less the option premium of SEK 256 million that MTG paid in 1997, 1998, and 1999.
In connection with the transaction, the Kinnevik group will account for a capital gain of approximately 800 MSEK.
If MTG sells the shares in TV1000 within a three-year period and realizes a capital gain, under certain circumstances Kinnevik would be entitled to one-third of that gain.
The transaction must be approved by the annual meeting of shareholders in MTG.
Stockholm, 23 March 2000
Vigo Carlund, President and CEO, +46-8-562 000 00
Industriförvaltnings AB Kinnevik is listed on the Stockholm Stock Exchange's A list (symbols: KINVA and KINVB) and on the Nasdaq National Market in New York (symbols: KVIKA and KVIKB).