Polish media giant sees share price plunge amid reports of feud between founder and children

One of Europe’s largest media and telecoms groups, Cyfrowy Polsat, has lost hundreds of millions of zloty in value after reports emerged last week of conflict between its founder, Zygmunt Solorz, who is one of Poland’s richest people, his new wife, and his children.

The disagreement, which media reports have likened to the famous TV series Succession, reportedly revolves around fears among the children, who sit on the boards of dozens of Solorz’s companies, regarding the influence of his wife over the business affairs of the 68-year-old billionaire.

Reports of the feud led to a drop in the company’s share price of up to 10% last week. It has recovered somewhat since Solorz announced that he would remove his children from the business, but remains around 5% below its value before the news broke out.

Source: stooq.pl

In a letter obtained by newspaper Gazeta Wyborcza, three of the billionaire’s children – Tobias Solorz, Piotr Żak and Aleksandra Żak – wrote to managers at four of the most important companies in his business empire – Cyfrowy Polsat, Telewizja Polsat, Polkomtel and Netia – expressing concern about their father.

They revealed that they have had little contact with him due to illness and that currently they are not even sure of his whereabouts. The children therefore warned managers to be wary of accepting orders issued by people who have recently acquired authority.

According to Gazeta Wyborcza, they are likely referring to Justyna Kulka, who became the billionaire’s fourth wife in March this year. She has worked at Polkomtel for over 12 years and is also a member of its board, as well as of the boards of about 40 of Solorz’s other companies.

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After news of the letter appeared in the media on Wednesday last week, shares in Cyfrowy Polsat Group fell by as much as 10%, wiping 900 million zloty (€210 million) off its value. The group includes Polkomtel, a mobile network operator; internet provider LTE; and Telewizja Polsat, one of Poland’s largest private broadcasters.

However, the shares recovered some of their losses after Solorz, who owns about 60% of Cyfrowy Polsat, issued a written statement to his employees announcing that he would remove his children from the management of his companies.

“I have recently realised that involving my children in the management of companies at this stage does not contribute to higher stability in the companies nor to building a better future for them,” read the letter, quoted by the Puls Biznesu business newspaper.

“I have therefore decided to change this situation and take action to remove my children from the authorities of the relevant companies in the coming weeks,” he added. By today, Cyfrowy Polsat’s shares were only around 5% down on their value on Tuesday last week.

In a separate interview with newspaper Super Express, Solorz explained that he is currently on a honeymoon with his new wife, “which, for professional reasons, we were unable to take earlier”.

“We are in Europe on a cruise. However, I keep myself up to date with the companies’ affairs and take part in their work all the time. Please don’t worry about me. I have everything under control,” he said. “The children are already grown up; they are over 30 and 40 years old; they have their own lives, and I have mine.”

Speaking to Bloomberg, Piotr Raciborski, an analyst at broker Wood & Co, said that “market concerns are justified” regarding developments in Solorz’s empire. “Investors may be afraid that any key business decisions may be frozen amid family conflict.”

Main image credit: Grupa Polsat Plus

Alicja Ptak

Alicja Ptak is senior editor at Notes from Poland and a multimedia journalist. She previously worked for Reuters.