SBS Broadcasting S.A. (NASDAQ: SBTV; Euronext Amsterdam N.V.: SBS) announced today that it has entered into a definitive agreement for its business to be acquired by funds advised by Permira (Permira) and affiliates of Kohlberg Kravis Roberts & Co. (KKR) in a transaction valuing SBS, on an enterprise value basis, at approximately €2.094 billion ($2.549 billion). An acquisition company jointly held by Permira and KKR has agreed to pay SBS €1.691 billion in cash for substantially all of SBS’s assets, and to assume substantially all of its liabilities, resulting in a total transaction value, excluding minorities, of approximately €1.864 billion ($2.269 billion). SBS’s business activities will be continued under ownership of Permira and KKR.

Following completion of the acquisition, SBS will be liquidated and the cash purchase price, together with proceeds from the exercise of options, distributed to shareholders. The liquidation and the distribution are expected to occur in November 2005. SBS shareholders and option holders are expected to receive in the liquidation approximately €46 per fully diluted share (or the dollar equivalent at the time of liquidation), in the case of option holders net of the exercise price of the options. All dollar amounts in this press release have been converted from the Euro at a rate of €1=$1.2175, last Friday’s closing exchange rate. At this exchange rate, a €46 per share distribution would be equivalent to approximately $56 per share.

Harry Evans Sloan, Executive Chairman of SBS, stated: "This transaction caps a tremendous period of growth and value creation for SBS. A €46 per share distribution would represent a premium of 15.9% above the share price on August 12, 2005 (the last trading day before the publication of an article containing a rumor regarding the possible sale of SBS) and 37.8% above the share price six months prior to that date.

"Since its founding 15 years ago and its listing in 1993, SBS has grown dramatically from three start-up Scandinavian television stations into one of Europe's largest broadcasting companies, reaching over 100 million people across nine countries. This achievement was only accomplished with the invaluable financial support of our investors and the hard work and dedication of our management team and employees.

"This investment by Permira and KKR is an endorsement of our company, our business model of providing content across all media platforms and our growth strategy. I am proud to turn the company's ownership over to two world class private equity firms who are committed to building upon SBS's success."

Markus Tellenbach, Chief Executive Officer of SBS, stated, "Since joining SBS four years ago, I have worked with Harry and our management team to prudently expand our footprint, diversify our revenue streams and improve our cash flow generating ability, while strengthening our margins and balance sheet. Permira and KKR have exceptional track records in building businesses, and I am pleased to have the opportunity to work with them in building on SBS’s position as one of the leading media groups in Europe."

In a joint statement, Götz Mäuser, Partner at Permira, and Dominic Murphy, Managing Director at KKR, said:

"We are delighted to acquire such a high quality business founded and built by Harry Sloan and led by CEO Markus Tellenbach and SBS's strong management team. We believe that SBS’s multi-territory presence, cross-media expertise and leading positions in high growth markets are excellent differentiators in a competitive environment. Both Permira and KKR are committed, long-term investors, and we look forward to working with management to build on SBS’s success."

The transaction was unanimously approved by a special committee of independent directors of SBS, as well as by the company’s board of directors. Deutsche Bank, financial advisor to the special committee, has provided an opinion that the purchase price is fair from a financial point of view to SBS shareholders.

SBS shareholders representing a minimum of 21.9% of the total outstanding common shares of SBS, including SBS’s largest shareholder Liberty Global and all directors and certain officers of the company, have entered into agreements to vote in favor of the transaction.

Under the acquisition agreement, SBS is required to pay Permira and KKR liquidated damages of €50 million if SBS is acquired by another purchaser prior to May 21, 2006 and in certain other circumstances.

The transaction is subject to competition clearance and must be approved prior to closing by two-thirds of the votes cast by SBS shareholders at an extraordinary meeting, which is expected to take place in October 2005. Upon completion of the transaction, SBS is expected to delist its common shares from Nasdaq and Euronext Amsterdam and commence voluntary liquidation proceedings.

Additional information about the asset sale, liquidation process and other important matters will be described in a shareholder circular to be distributed in connection with the extraordinary shareholders meeting to be held to consider the transaction.

Deutsche Bank is acting as financial advisor to the special committee of SBS, and Sullivan & Cromwell LLP and Arendt & Medernach are acting as the committee’s legal advisors. Lehman Brothers is acting as financial advisor to Permira and KKR, and Freshfields Bruckhaus Deringer and Simpson Thacher & Bartlett LLP are acting as their legal advisors. Barclays Capital, Lehman Brothers and Royal Bank of Scotland will provide debt financing for the transaction.

Conference Call
SBS will host a teleconference to discuss the transaction on August 22, 2005 at 10:00 a.m. New York time / 3:00 p.m. London time / 4:00 p.m. CET time. To access the teleconference, please dial +1-888-811-2256 (U.S. callers) or +1-973-935-2409 (international callers) ten minutes prior to the start time. The teleconference will also be available via live webcast on SBS’s website, located at www.sbsbroadcasting.com. If you cannot listen to the teleconference at its scheduled time, there will be a replay available through August 29, 2005 that can be accessed by dialing +1-877-519-4471 (U.S. callers) or +1-973-341-3080 (international callers), passcode: 6405396. A replay will also be archived on the company’s website.


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