Penta hands over control of Slovakia's SME

By bne IntelliNews November 6, 2014

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Slovak financial group Penta has agreed to hand over majority control of the publishing house behind influential daily SME, following huge controversy over its recent purchase. It remains unclear, however, who will now control the newspaper's editorial content, and the former editors say it makes no difference to their move to set up a rival.

NAMAV, newly-founded and financially-backed by Czech-Slovak investment group Penta Investments, has agreed to transfer a 5% share of its recently acquired 50% stake in Slovak publishing house Petit Press to the other shareholder in the company,  financial company Prva slovenska investicna skupina (PSIS), sme.sk reports.

The deal was made following negotiations between representatives of PSIS, NAMAV and Penta. The shareholding agreement will be signed in December at the latest.

NAMAV acquired the 50% stake in Petit Press from German Rheinisch-Bergische Verlagsgesellschaf in October for around €15mn. While the value of the deal is small, it has made a big splash in Central Europe, which has seen a procession of media titles taken over by oligarchs and politicians over the past few years.

The editorial team at SME walked out as the deal was announced, citing Penta's previous spats with the paper over its reporting of the "Gorilla" scandal. This involved a series of intelligence service tapes allegedly featuring Penta executives agreeing deals with senior members of the previous government. The editors say Penta only wants to control SME in order to increase is political clout in the country.

According to the shareholder agreement attached to the latest deal, PSIS will have management responsibility, while NAMAV/Penta will control the publishing house. That leaves it unclear who will have final say on editorial decisions, although the Slovak Spectator reports it will remain "the domain of the chair of the board of directors and co-founder of SME, Alexej Fulmek".

However, Tomas Bella, former deputy editor of SME and one of the team that walked out last month, told bne/Intellinews the deal will not affect their stance. "This does not make any difference to our plans. We will launch the first version of our website next week," he said. The departed team had previously suggested they could return to SME if PSIS - a long-term investor in Petit Press - took control rather than Penta.

Besides SME, Petit Press publishes newspapers Uj Szo and Ko­rzar, free newspaper Echo, regional weeklies MY, The Slovak Spectator and news portal sme.sk. Petit Press posted a net profit of more than €500,000 and revenues of €25.3mn in 2013.

Penta is a Slovak financial group that operates  in more than 10 European countries, mainly in CEE. It has investments in the retail, real estate, healthcare, aerospace industry, mechanical engineering, utilities, entertainment and banking sectors.

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