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Deutsche Bank buys stake in Turkey's Dogan

Deutsche Bank has agreed to buy a 22 percent stake in Dogan Gazetecilik , the newspaper unit of Turkey's leading media holding company, while the unit extends its reach with the purchase of another paper.

Reuters
00:00 - 27/07/2007 Cuma
Güncelleme: 22:51 - 27/07/2007 Cuma
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Deutsche Bank buys stake in Turkey's Dogan
Deutsche Bank buys stake in Turkey's Dogan

Deutsche Bank agreed to pay $88 million for the stake, buying all the shares in a restricted rights issue, said Dogan Gazetecilik, an affiliate of Dogan Yayin in a statement on Friday.


Dogan Gazetecilik also announced it was buying the owner of Vatan newspaper for $18 million, adding to its broad newspaper portfolio.


The company publishes centrist newspaper Milliyet, liberal Radikal and sports paper Fanatik. Top-selling paper Hurriyet newspaper is held separately.


Dogan Yayin, part-owned by Dogan Holding , is expanding by focusing on joint ventures and strategic partnerships. It recently sold a stake in its Dogan TV to Axel Springer . It had said last week it was in talks with a view to selling up to 25 percent in the newspaper arm.


Analysts said the purchase of Vatan could run into competition problems.


"This one will be scrutinised by the competition authority. Dogan has a 60 percent share of the advertising market in newspapers, and this will add around five percentage points," one analyst in Istanbul said.


But he said the purchase made sense, because it would make Dogan Gazetecilik a more attractive company for a potential buyer.


"I think they are going to sell the whole thing (Dogan Gazetecilik) ... and Vatan, Posta and Milliyet would be a decent portfolio for someone coming in," he said.


Shares in Dogan Gazetecilik rose 0.2 percent on Friday, compared to a 1.4 percent fall on the main index . Analysts said the price Deutsche paid for the stake and the price paid for Vatan were good for Dogan Gazetecilik.


"The price is very attractive, both in the purchase and in the sale," said EFG Istanbul analyst Toygun Onaran, noting the price Deutsche agreed to pay represented a premium of about 8 percent on Thursday's close.


The media sector in European Union candidate Turkey is growing fast, and Dogan Yayin said in April it expected advertising revenue to grow nearly 30 percent this year.


The Deutsche deal follows other moves by foreigners into the sector, including the purchase of a broadcaster last year by Rupert Murdoch's News Corp. and a Turkish partner.


Several media assets are coming up for sale this year, including, according to sources familiar with the situation, up to 50 percent of the media business of Turkish conglomerate Cukurova.


A leading TV channel ATV and popular newspaper Sabah, which were seized by the government earlier this year, are also expected to go to auction.

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