MTG to split into two companies

One becomes two: MTG and Nordic Entertainment Group

Press release

The Board of Directors of Modern Times Group MTG AB (publ) (“MTG”) has decided to initiate a process to split MTG into two companies by distributing all of the shares in Nordic Entertainment Group (comprising the Group’s Nordic Entertainment, MTG Studios and Splay Networks operations) to MTG’s shareholders, and listing these shares on Nasdaq Stockholm. The Board intends to propose the distribution and listing of the shares at an Extraordinary General Meeting.

Following the announcement by MTG’s largest shareholder, Kinnevik, that it intends to distribute its entire shareholding in MTG to its shareholders in Q3 2018, MTG will await the completion of the distribution before continuing with its work towards the previously announced distribution of Nordic Entertainment Group (NENT Group). MTG remains committed to the split and distribution of all of the shares in Nordic Entertainment Group (comprising MTG Nordic Entertainment, MTG Studios and Splay Networks) to MTG’s shareholders, and the listing of these shares on Nasdaq Stockholm. The process is subject to, inter alia, the approval of an Extraordinary General Meeting of MTG’s shareholders and will not now be completed during 2018.

 

Download process update press release

Download announcement press release

Presentation

The splitting of MTG will create two separate companies with clear investment profiles that are well positioned to capitalise on consumer trends, capture growth opportunities, and generate sustainable value for owners, customers and employees. See the investor presentation for further details on the rationale of the split and descriptions of both businesses.

Download Investor Presentation

Conference call

MTG hosted a conference call to present the proposed split and distribution of shares on Friday 23 March at 09:00 CET.

 

The conference call webcast is available here.

Download investor presentation for the conference call 

FAQ

What has been announced?

MTG’s Board has decided to initiate a process to split MTG into two companies by distributing all of the shares in Nordic Entertainment Group to MTG’s shareholders and listing these shares on Nasdaq Stockholm.

The Board intends to propose the distribution and listing of the shares at an Extraordinary General Meeting of its shareholders.

The split will create two separate companies with clear investment profiles that are well positioned to capitalise on consumer trends, capture growth opportunities, and generate sustainable value for owners, customers and employees.

Why do this now?

This is a natural next step in MTG’s strategic transformation. Now is the right time to initiate a split of MTG into two separate and listed companies, in order to maximise the focus and potential of each group for the benefit of owners, customers and employees. The split follows the same structure as the proposed TDC combination, and with all the work we have done on strategy and how to separate the businesses, this makes full sense.

What will the two companies comprise after the split?

Modern Times Group MTG AB will comprise MTG’s current esports (ESL, DreamHack and ESEA), online gaming (InnoGames and Kongregate) and digital video content (Zoomin.TV, Engage Digital Partners) operations, as well as other minority holdings (Comosa AG and BITKRAFT). MTG will be well funded and will focus on developing and expanding its portfolio of hyper growth global digital companies through a flexible buy and build strategy, which will be centred around key digital entertainment verticals.

Nordic Entertainment Group will comprise MTG’s current Nordic Entertainment and Studios business segments, as well as Splay Networks. Nordic Entertainment Group will develop and invest in its position as a fully integrated broadcasting, digital communication and content production company.

Why is this transaction good for MTG’s shareholders?

The split will create two separate companies with clear financial profiles and equity stories, facilitating fair valuation of both businesses and providing shareholders with two distinct investment opportunities. The separation also provides both businesses with clearer focus, enables separate incentivisation models to attract and retain key talent, simplifies decision-making processes and improves their agility to capitalise on growth opportunities in order to create greater value for shareholders.

What approvals are required to split MTG and distribute the shares in Nordic Entertainment Group?

The split is subject to the approval of the general meeting of shareholders after which MTG intends to apply for the listing of Nordic Entertainment Group at Nasdaq Stockholm, which in turn requires approval and registration of a listing prospectus by the Swedish Financial Supervisory Authority.

Kinnevik intends to distribute its entire shareholding in MTG to its shareholders in Q3 2018, what implications does this have on the split process?

MTG will await the completion of the distribution before continuing with its work towards the previously announced distribution of Nordic Entertainment Group (NENT Group). MTG remains committed to the split and distribution of all of the shares in Nordic Entertainment Group (comprising MTG Nordic Entertainment, MTG Studios and Splay Networks) to MTG’s shareholders, and the listing of these shares on Nasdaq Stockholm. The process is subject to, inter alia, the approval of an Extraordinary General Meeting of MTG’s shareholders and will not now be completed during 2018.

 

 

 

Contacts

Matthew Hooper
EVP, Head of Corporate Communications
+44 77 6844 0414
matthew.hooper(at)mtg.com
Stefan Lycke
SVP, Head of Investor Relations
+46 73 699 27 14
stefan.lycke(at)mtg.com
Tobias Gyhlenius
Group Head of PR
+46 736 992709
tobias.gyhlenius(at)mtg.com

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