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EM.TV Merger Complete

The restructuring of EM.TV Merchandising AG is complete into EM.TV Vermögensverwaltungs AG, with the resulting company to be known henceforth as EM.TV AG, headquartered near Munich, Germany.

In accordance with the restructuring concept, preferred shares allocated to former EM.TV Merchandising AG shareholders are being converted into ordinary shares and certificates. Former shareholders will receive 10 shares in EM.TV AG for 73 shares in the old company, as well as 10 certificates in two series. Each certificate carries an entitlement to .39 ordinary share at a price of 2.50 Euros (series 1) and 3.50 Euros (series 2) per share. The initial listing of ME.TV AG shares on the Frankfurt stock exchange is planned for April 27, 2004. As this point, trading of conversion rights will cease.

This marks the final steps in recovery from the once childrens media giant. Brothers Thomas and Florian Haffa, formerly top executives of German kids television group EM.TV, were found guilty April 8, 2003 of fraud and fined $1.5M. Munich judge Huberta Knoeringer said the Haffas deliberately misrepresented EM.TV's finances to manipulate the company's share price and dismissed their claim that mistakes were made because of confusing international accounting procedures and business practices common to the media industry.

EM.TV rose rapidly in the late 1990s from a merchandising company to produce and distribute kids shows and went on a buying spree, overpaying for assets such as the Jim Henson Co. ($680M) and a 50% stake in the Formula One racecar circuit ($1.5 billion). The Henson family bought back the Jim Henson Co. for $89M in May 2003.

The highly complex restructuring on the convertible bond, and therefore the full restructuring of the company, has been completed in a timely manner, said Werner E. Klatten, chairman of the EM.TV AG management board. With this merger, we now also have the corporate framework necessary to develop further the operating business of the new EM.TV, and to lead the media company as rapidly as possible into profitability.

EM.TV & Merchandising AG produces programs for children and youth markets, handles the worldwide distribution of TV rights and the marketing of merchandising rights. With around 26,000 half-hour episodes of entertainment for children and youth markets, the companys library is among the worlds largest. For more information, visit www.em-ag.de.

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