Sopharma Owner, Partner Win Battle for WAZ Asssets in Bulgaria

Ognyan Donev (R), chairman and majority owner of Sopharma, the biggest Bulgarian generic drugmaker, and Lyubomir Pavlov (L), former head of Sofia-based Municipal Bank, have been on good personal and professional terms even before the deal. Photo by BGNES

Bulgaria's competition watchdog said it has given the green light to the acquisition of WAZ Mediengruppe assets in Bulgaria by Ognyan Donev and Lyubomir Pavlov, who were recently accused of an attempted corporate mini-coup.

The ruling cements the decision of Bulgaria's Business Registry Agency to register 83% of the wide-circulation dailies "Trud" (Labor) and 24 Chasa (24 Hours) as property of Ognyan Donev, chairman and majority owner of Sopharma, the biggest Bulgarian generic drugmaker, and Lyubomir Pavlov, former chairman of the Sofia-based Municipal Bank.

It comes just ten days after the two partners requested that the regulatory body come up with a statement on the enterprise concentration control, one of possibilities how to avoid or liquidate abuse of dominant position.

The move was interpreted as the first indication that Donev plans to increase his stake in the holding, which is now called Media Group Bulgaria.

The ownership of WAZ Mediengruppe assets in Bulgaria, which include the two wide-circulation Trud and 24 Hours newspapers, changes hands just four months after Vienna-registered BG Privatinvest Ltd acquired a majority stake in the publisher, while the remainder was held by local businessmen Lyubomir Pavlov.

At the time Donev was not a shareholder, but just a financial investor, who secured the money for the purchase of WAZ assets.

The new owners acquired 100% in WAZ Zeitungsgruppe Bulgarien (ZGB). The price of the deal was not disclosed, but reports said it ranged from BGN 60 M to BGN 120 M.

The transaction included Trud and 24 Hours daily newspapers, 168 Hours weekly newspaper, Trud weekly, a few magazines, eight regional newspapers, a printing house, distribution company Strela and ZGB's headquarters in downtown Sofia and across the country.

The conflict between the former partners flared up at the end of last month after Hristo Grozev, who represents the Vienna-registered BG Privatinvest Ltd, controlled by him, Austrian Karl Habsburg, and German Daniel Rutz, accused their Bulgarian partners of an attempted illegal corporate take-over of the newspapers.

Donev and Pavlov say the changes are aligned accordingly to the investment amount contributed by different partners.

Bulgaria's trade registry initially blocked the allegedly illegal transfer of a 83% stake in the holding at the insistence of Grozev, but later, following the intervention of the Justice Ministry, gave it the green light.

Owners of Bulgarian alcohol producer "Vinprom Peshtera" and of "New Bulgarian Media Group," mother and son, Irena Krasteva and Delyan Peevski, publishers of the dailies "Monitor" and "Telegraph," were also involved in the conflict with Pavlov accusing Grozev of attempting to include them in the business as shareholders.

Grozev, who firmly denied the accusations, is set to fight for his rights in the court room.

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