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Bertelsmann CEO may head to AOL

Thomas Middelhoff, former CEO of German media giant Bertelsmann, addresses the World Economic Forum in Januanry. PHOTO: AP

Speculation swirled yesterday in the wake of Thomas Middelhoff's sudden departure as Bertelsmann CEO, with a published report saying he was eyeing a post at AOL-TimeWarner.

The report in Bild quoted "close friends and associates" as saying his contacts at AOL-TimeWarner were hoping to lure him.

The newspaper's sources rejected a report in a rival German paper yesterday, claiming that the erstwhile CEO at the world's third-largest media corporation would take the top spot at German Telekom.

In a stunning move Sunday evening, the Bertelsmann supervisory board announced Middelhoff and the corporation were parting ways over "differences over the future course" of the multi-national.

The surprise announcement added that board member Gunter Thielen was named as a replacement for Middelhoff.

The statement made no reference to a report in Monday's editions of Berliner Kurier newspaper that Middelhoff was leaving to become CEO of German Telekom, still in turmoil following the departure of Ron Sommer two weeks ago. Helmut Sihler was named transitional Telekom head for the next six months with hitherto Telekom technical chief Gerd Tenzer as his number two man.

Analysts have said both Sihler and Tenzer lack the charisma needed to pilot Telekom and restore the confidence of thousands of small-time investors who have seen their Telekom shares plummet in value in recent months.

Some insiders have been quoted as saying the dynamic Middelhoff would more than fit the bill at Telekom. But a Telekom spokesman declined comment, saying, "We do not engage in that solevision Monday morning quoted `industry sources' as indicating it was unlikely Middelhoff would move to Telekom. Aside from the fact that he has a mobile and uses it frequently, he doesn't have a clue about Telekom," an on-air analyst said on ARD breakfast television.

Middelhoff was known to be increasingly at odds with Bertelsmann founder Reinhard Mohn, who is said to be close friends with Thielen, 59.

ARD quoted insiders as saying Mohn objected to Middelhoff's ambitious goal of taking the corporation public by 2005.

During his four-year stint at the helm of Bertelsmann, Middelhoff was credited with having transformed a staid German publishing house into a dynamic multi-national media company.

In a few short years he steered the venerable company's transition by radically changing corporate structure and rejuvenating his management team to lead the company's more than 80,000 employees in 56 countries.

Middelhoff's first groundbreaking deal involved securing a company interest in AOL Europe, which paid off handsomely for Bertelsmann.

In early February 2001, Middelhoff and CFO Siegfried Luther realized another deal of a lifetime, when Bertelsmann AG acquired the controlling interest in the RTL Group, Europe's largest and most successful TV, radio and movie production group.

He also shocked some on the Bertelsmann board with his decision to run the company's worldwide book businesses from New York under the Random House umbrella. Then in a turn-about he resolutely divested Bertelsmann of AOL Europe and pay-TV in Germany by selling Internet services company mediaWays to Spains Telefonica.
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