According to Securities and Exchange Commission documents, the world's third-largest media company filed to sell 900,000 shares of AOL stock worth more than $114 million. Bertelsmann is a partner with AOL in four ventures in Europe and in an Australian project that is expected to launch soon.
Although the stock sale was disclosed in public documents yesterday, a spokeswoman for AOL said the sale occurred at the end of February. Bertelsmann could not be reached for comment.
The disclosure of Bertelsmann's move, along with a sale by a charitable foundation that AOL chief executive Steve Case had established, comes as the online giant's stock (AOL) is trading at its highest levels. The stock closed today just shy of 73 points, up 4-5/8 over yesterday.
AOL spokeswoman Tricia Primrose estimated that the sale represented 25 percent of Bertelsmann's stock holdings in AOL. She said that the sale does not indicate any change in the relationship between the companies, noting that the European partner "still has considerable holdings in the company." Primrose added that Bertelsmann's remaining investment in AOL--estimated at $342 million--pointed to clear signs of "confidence in and commitment to AOL."
Recently, privately held Bertelsmann paid AOL $75 million as part of the companies' acquisition of CompuServe's European operations. Bertelsmann also recently acquired Random House in a deal whose terms were not disclosed.
Brian Oakes, an analyst at Lehman Brothers, said that taking into consideration the $75 million paid in the transaction, "You'll find [Bertelsmann hasn't] decreased their investment in AOL at all." He explained that Bertelsmann's sale of the stock "is almost a perfect offset after taxes."
David Simons, managing director at Digital Video Investments in New York, said Bertelsmann's decision to sell appears to be "prompted more by a judgment that the value of the stock warrants a lightening-up."
Unlike company executives who occasionally sell large amounts of stock, he said, Bertelsmann "has probably something to the right of a decimal point worth of its wealth [invested] in AOL stock, so a decision to sell isn't prompted by a need to diversify."
Stuart Applebaum, a spokesman for Bertelsmann's English-language book publishing operations, would not comment on the stock sale, but said the action in no way reflects a rift between the two companies.
"The relationship between AOL and Bertelsmann is as strong as ever," Applebaum said. "The equity position Bertelsmann enjoys with AOL is one that is very important to us."
In addition to the Bertelsmann sale, a filing yesterday by the Stephen Case Foundation revealed that the organization was selling $2 million worth of stock in the online giant.
Bertelsmann's investment in AOL dates back to March 1995, when the Gütersloh, Germany-based company bought a 5 percent stake. AOL's stock value since has increased eightfold.