CTC Media’s stockholders approved the sale of 75% of the company to Russia’s UTV Management at a special meeting held yesterday.
The sale to UTV was approved by people who own 62.7% of CTC’s outstanding shares, while 54.4% approved a merger between CTC Media and a wholly owned subsidiary called CTCM Merger Sub.
The sale required at least half of CTC’s outstanding shares to vote in favour for it to go through.
“We are delighted that our stockholders have approved the sale of a 75% interest in our operating business in advance of the effectiveness of the foreign ownership limitations imposed by the Russian Mass Media Law,” said CTC Media co-chairman of the board, Natasha Tsukanova.
“We are also pleased that stockholders have approved a subsequent merger transaction that will allow us to return value in cash to stockholders, assuming receipt of a license from the Office of Foreign Assets Control of the US Treasury Department, which is still pending.”
The decision, triggered by imminent changes to Russian media-ownership rules, comes after the Russian government gave the green light to the planned sale to UTV Management earlier this week.
CTC Media’s largest stockholder, MTG Russia, also backed the sale in a proxy vote ahead of the special meeting of stockholders in London.
CTC entered a definitive agreement to sell a 75% stake in its operating businesses to UTV Management for US$200 million (€178 million) in cash back in September. MTG, which holds a 38% stake in CTC, indicated early on its support for the deal, which was motivated by foreign ownership restrictions imposed by the Russian government.
Russian president Vladimir Putin signed an amendment to the Russian law on mass media at the end of last year that will limit foreign ownership of media companies in Russia to 20%, down from the current limit of 50%. This will apply to both existing and future foreign ownership and comes into effect on January 1, 2016.