GUNTER THIELEN, the chief executive of Bertelsmann, has refused to rule out a sale of his company’s half-share of SonyBMG, generating proceeds that could be used to buy out the minority shareholder Groupe Bruxelles Lambert (GBL).

The leader of Europe’s biggest media group said that the company was midway through a strategic review of its portfolio, but made clear that some of Bertelsmann’s key divisions were not for sale.

Herr Thielen, speaking as the company unveiled its full-year results, said that he “could not imagine” Bertelsmann without Gruner + Jahr, its magazine arm, or Random House, the publisher. Asked to clarify his remarks, Herr Thielen said that he “cannot imagine” Bertelsmann without RTL, the television unit, or Arvato, the services group. When asked about SonyBMG, the home to Il Divo and Kelly Clarkson, Herr Thielen said that “he could not imagine anything ”.

Bertelsmann is under pressure to decide how it will respond to a demand by GBL for a flotation. The German group has never been public and Liz Mohn, the company’s controlling shareholder, is sceptical of the capital markets.

GBL could allow Bertelsmann to buy out its stake, as an alternative to a float, and the investment company wants about €5 billion (£3.5 billion) for its holding. However, Bertelsmann has debts of €3.9 billion and last year only just moved inside some of its key long-term debt targets.

Herr Thielen said that the company would stay with its target of keeping its overall debt at least 2.2 times underlying income. Bertelsmann ended 2005 with borrowings of 2.3 times underlying income, giving it little room to borrow more without selling assets.

Although Herr Thielen would not say how he would respond to GBL’s demand, speculation has centred on whether the German group would offload its half of SonyBMG, which is worth an estimated €1.5 billion to €2 billion. SonyBMG accounted for four fifths of revenue at Bertelsmann’s music division, with the rest coming from the German group’s wholly owned music publishing business. Profits at the music division increased 9.3 per cent last year to €177 million before restructuring charges and despite a 7.2 per cent decline in underlying revenues to €2.1 billion.

MIXED MEDIA RESULTS

By division 2005 (2004): RTL, TV, owner of Five: €739 million (€668m) Random House, books publisher: €167m (€140m) Gruner + Jahr, magazines: €374m (€199m)
BMG, music: €74m (€228m) Arvato, services: €431m (€298m) Direct Group, book clubs: €10m (€34m)