(Bloomberg) — Lenders are preparing a loan for about €1 billion ($1 billion) to fund the sale of Axel Springer SE’s real estate ads unit Aviv Group.
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KKR Capital Markets and Deutsche Bank AG are leading the process, according to people familiar with the matter. It’s the latest part of a plan by KKR & Co., the Canada Pension Plan Investment Board and German billionaire Mathias Döpfner to split up media conglomerate Axel Springer.
The financing is being shown to a select group of investors, before shortly being launched for general syndication to a wider buyer base, added the people, who asked not to be identified because the deal is private.
Pre-marketing such a deal has become commonplace in the leveraged loan market, in order to gauge interest and drum up initial orders. But with competition rife for new money deals after a recent lack of mergers and acquisitions, sponsors typically restrict this phase to the funds they know best — referred to in the market as “friends and family.”
Spokespeople for CPPIB and Deutsche Bank declined to comment, while representatives for KKR and Axel Springer didn’t immediately respond to requests for comment.
Split Financing
The financing forms part of a total €4 billion debt package to fund the overall split. One segment has already gone through the market, with a €1.95 billion leveraged loan closing in December for jobs platform The Stepstone Group. The euro- and dollar-denominated term loan B refinanced existing Axel Springer debt and put cash on its balance sheet.
The rest of the financing is expected to come from private credit firms. The deal to split up Axel Springer values the whole company at €13.5 billion, including more than €10 billion for the classifieds business, Bloomberg has previously reported.
The group’s media assets, including Politico and Business Insider, will remain within Axel Springer, while four classified ad websites, including Stepstone and Aviv, will be spun off as separate joint ventures in which KKR and CPPIB will be majority shareholders.
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