TALLINN - Estonian media baron Hans Luik may become sole owner of the biggest Estonian media organization, the Ekspress Grupp, if he finds the necessary funds to buy his partner's stake.
Bonnier Group, a Swedish media concern, appears to have forced the issue after saying it will sell its 50 percent stake in Ekspress Grupp on condition that Bonnier can buy Luik's half for the same price if he fails to purchase its stake within one month.
"We are not interested in getting rid of our shares in Ekspress Grupp," said Lars-Gosta Juhlin, Bonnier's representative on Ekspress Grupp's supervisory council.
"Our priority is to be a majority owner. It always simplifies things if there is one decision maker. Two parties usually have different standpoints."
Luik said he would have loved to continue cooperation on an equal basis with the Scandinavian publisher.
The price of the deal has not been officially disclosed. According to the business newspaper Aripaev, one of Bonnier's other investments in Estonia, it is around 70 million kroons ($4.04 million) to 80 million kroons - less than the 150 million kroons to 200 million kroons Bonnier paid Luik for its shares in 1998, according to Aripaev.
But Juhlin refuted such claims. "Aripaev's estimate is completely wrong and not even close to reality," Juhlin said. Bonnier has carefully assessed the value of Ekspress Grupp, taking into account its profit and debts, he said.
Luik said that the deal was favorable and that Estonian banks had shown great interest in supporting the biggest Estonian media concern.
"I do not need partners for the time being. The situation might change when Estonia joins the European Union," said Luik.
Although Bonnier has discussed ownership with Luik several times since 1998 he has not been interested in selling his stake.
"We haven't made concrete offers. We've been discussing a possible change of ownership," said Juhlin.
Luik said Bonnier had made its offer because it is paying more attention to the local Scandinavian market.
Some newspapers have speculated that Bonnier is in financial difficulties and is thus looking to sell its investments in countries like Lithuania, Poland and Scotland. The group made a $15.2 million loss in the first nine months of this year, while Ekspress Grupp's half-year results showed a $483,000 profit.
"This year was low for all Western media companies. That is not the reason why we're selling. Maybe we're buying," said Juhlin.
The Ekspress Grupp has 50 percent stakes in an array of Estonian titles and companies, including the tabloid Ohtuleht, the daily Eesti Paevaleht, the Ajakirjade Kirjastus publishing house, Lehepunkt, Expresspost and Eesti Meedia Foto. The company is also sole owner of the biggest weekly Eesti Ekspress, and owns 89 percent of the biggest Estonian printing plant Printall.
According to Luik Eesti Ekspress, Ohtuleht, Ajakirjade Kirjastus, Lehepunkt and Printall are working profitably, while the company's Internet portal Mega, which has merged with Eesti Paevaleht's online version recently, is operating at a loss. Overall, he said he would make a profit this year.
Mart Kadastik, chairman of the competing Eesti Meedia, commented that the possible changes in ownership were just speculation: "Luik wishes to buy the shares. We have to wait and see what happens in four weeks."
There is nothing extraordinary about one person owning such a large Estonian company. The daily Postimees, which is controlled by Eesti Meedia, previously belonged to Heldur Tonisson before Schibsted acquired 92.5 percent of the company in 1998 and Hans Luik was sole owner of Ekspress Grupp before Bonnier joined him.
Kadastik still believes Bonnier may hang on to Ekspress Grupp. "Big companies mean businesses can be run better. A sole private owner might bring instability."
According to Kadastik the merger of the tabloids of Ekspress Group and Eesti Media that took place a year ago was successful. The tremendously huge 35 million kroon total loss before the merger turned into a 10 million kroon profit this year.
Ekspress Grupp's partner in Eesti Paevaleht is Vivarone, which is owned by Jaan Manitski. Luik believes that if he gets Bonnier's stake in the paper he will be able to save it. Paevaleht, the second largest Estonian daily with a circulation of 44,500 copies, is the only Estonian newspaper in financial difficulties, according to Tarmu Tammerk, head of the Estonian Newspapers Association.
Luik said he was not planning any big changes in the Ekspress Grupp, but would approach different tasks step by step.
"When the shares in the company are divided exactly in half, then it inevitably creates a situation where people are praising rather than demanding things from the management."
Besides the media company, Luik holds a stake in the Estonian information directory Ekspress Hotline and in the debt collecting company Julianus Inkasso. He is also active in real estate and advertising. He has a joint company with former classmates which processes soft-drink bottles into polyethylene terephthalate powder for export to China.