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Case
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Reference no. 9-208-096
Published by: Harvard Business Publishing
Originally published in: 2008
Version: 23 February 2009

Abstract

Der Spiegel is Germany's most influential political news magazine. In the 1970's, its founder Rudolf Augstein gave a 50% ownership stake to his employees and sold another 25% to rival publisher Gruner Jahr, but retained significant control during his lifetime by stipulating in the bylaws that every important business decision would require a 76% shareholder approval. When Augstein died in 2002, however, his co-owners exercised the option the same bylaws gave them to buy a 0.5% stake each from Augstein's heirs, who thus lost their veto rights. In September 2007, the benefits and costs of sharing ownership with employees become particularly salient when the employees block the CEO's proposal to acquire 50% of the Financial Times Deutschland. Faced with the new balance of power, Rudolf's eldest son Jakob Augstein is forced to rethink the role that his family can play in Spiegel going forward. Should he try to buy back the pivotal stake? Sell the family stake altogether? But to whom, and at what price?
Location:
Size:
840 employees, EUR234 million
Other setting(s):
2007

About

Abstract

Der Spiegel is Germany's most influential political news magazine. In the 1970's, its founder Rudolf Augstein gave a 50% ownership stake to his employees and sold another 25% to rival publisher Gruner Jahr, but retained significant control during his lifetime by stipulating in the bylaws that every important business decision would require a 76% shareholder approval. When Augstein died in 2002, however, his co-owners exercised the option the same bylaws gave them to buy a 0.5% stake each from Augstein's heirs, who thus lost their veto rights. In September 2007, the benefits and costs of sharing ownership with employees become particularly salient when the employees block the CEO's proposal to acquire 50% of the Financial Times Deutschland. Faced with the new balance of power, Rudolf's eldest son Jakob Augstein is forced to rethink the role that his family can play in Spiegel going forward. Should he try to buy back the pivotal stake? Sell the family stake altogether? But to whom, and at what price?

Settings

Location:
Size:
840 employees, EUR234 million
Other setting(s):
2007

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