MTG PROVIDES DETAILS OF CDON GROUP SPIN-OFF AND SUBSCRIBES TO SEK 250 MILLION CONVERTIBLE BOND ISSUE BY CDON GROUP

MTG PROVIDES DETAILS OF CDON GROUP SPIN-OFF AND SUBSCRIBES TO SEK 250
MILLION CONVERTIBLE BOND ISSUE BY CDON GROUP

Modern Times Group MTG AB (publ.) (‘MTG' or ‘the Group'), the
international entertainment broadcasting group, today announced that the
prospectus for the listing of its wholly owned subsidiary CDON Group AB
(‘CDON Group') is available on www.mtg.se (http://www.mtg.se/),
www.cdongroup.com (http://www.cdongroup.com/) and
www.handelsbanken.se (http://www.handelsbanken.se/). CDON Group's shares
will commence trading on the Small Cap market of Nasdaq OMX Stockholm
under the ‘CDON' symbol on Wednesday 15 December 2010, and the record
date for the dividend of shares in CDON Group to MTG shareholders is
Friday 17 December 2010[1].

Following an Extraordinary General Meeting of CDON Group shareholders
held on 25 November 2010, CDON Group has issued a SEK 250 million
convertible bond. MTG has subscribed for 100% of the issued bond, which
is unsubordinated, bears interest of 2.85 percent per annum, and is due
to be repaid on 2 December 2015 if not redeemed or converted prior to
maturity. The bond may be converted into CDON Group shares between 15
June 2012 and 1 December 2015. The conversion rate has been set at 125
per cent of the volume-weighted CDON Group share price between 15
December 2010 and 14 January 2011 (the first 20 days of trading in CDON
Group's shares).

MTG shareholders will receive one share in CDON Group for each MTG class
A and/or class B share that they hold. MTG class C shareholders are not
entitled to receive dividends. The last trading day on which MTG's
shares include the right to receive CDON Group shares will be Tuesday 14
December 2010, while the first day of trading in MTG's shares excluding
the right to receive CDON Group shares will be Wednesday 15 December
2010.

MTG's Viasat Broadcasting has also concluded a three year marketing
agreement with CDON Group, whereby CDON Group will continue to advertise
on MTG's free-TV channels in Scandinavia, in order to promote its
various internet stores.

CDON Group's financial results for the third quarter and nine months
ended 30 September 2010 are included in the listing prospectus, and CDON
Group's fourth quarter and full year 2010 financial results will be
announced on 2 February 2011. CDON Group's sales grew by 27% year on
year to SEK 1,441 (1,131) million for nine months ended 30 September
2010, and CDON Group's operating income increased by 31% year on year to
SEK 97 (75) million, with a stable operating margin of 7% (7%) for the
nine month period.

Hans-Holger Albrecht, President & CEO of MTG, commented: “The listing of
CDON Group's shares marks the latest step in a journey that started over
10 years ago with the first appearance of the CDON brand. The Company
has grown rapidly and successfully to become a market leader in its
Nordic operating segments. Furthermore, CDON Group has a scalable and
efficient platform that will enable it to continue to grow and to
capitalise further on the accelerating migration of retail sales from
the high street to the internet.

“We have subscribed to the convertible bond issue, in order to provide
the company with the financial resources to fund its further
development, and to provide MTG with the option of a future equity
interest in this exciting business.  

“This equity dividend demonstrates our commitment to delivering enhanced
total shareholder returns and is in addition to the SEK 5.50 cash
dividend per share that we paid to shareholders earlier this year.”

***

ABOUT CDON GROUP

CDON Group, which comprises all of MTG's internet retailing business,
was launched in February 1999 with the introduction of CDON.COM, which
initially sold music CDs via internet sites in Sweden, Norway and
Denmark. CDON.COM is now the number one online retailer of entertainment
products in the Nordic region, with a broad offering of DVDs, computer
games, CDs, books and electronic products, as well as music downloads
and on-demand film streaming services. Finnish internet book retailer
BookPlus.fi was acquired in 2007 and Swedish online toy retailer
Lekmer.se was acquired on 31 March 2010.

CDON Group's Fashion business was established in 2007 with the
acquisition of fashion retailer Nelly.com and children's clothing
retailer LinusLotta.com, whilst shoe retailer Heppo.com was launched on
31 August 2010. The Sports & Health business was established in 2008
with the acquisition of nutritional supplement retailer
Gymgrossisten.com and dietary and health supplement retailer
Bodystore.com.

Mikael Olander has been President and Chief Executive Officer of CDON
since 2000, and of CDON Group since it was established in 2007.

Please visit www.mtg.se (http://www.mtg.se/) or
www.cdongroup.com (http://www.cdongroup.com/) for more information about
CDON Group and its businesses.

***

[1] Distributed shares will be recorded on VP accounts on 20 December
2010

For further information, please visit www.mtg.se (http://www.mtg.se/) or
contact:

Hans-Holger Albrecht, Chief Executive Officer
Tel: +46 (0) 8 562 000 50

Investor & Analyst Enquiries:
Matthew Hooper
Tel: +44 (0) 7768 440 414
Email: investor.relations@mtg.se (investor.relations@mtg.se)   

Media Enquiries:
Bert Willborg                
Tel: +44 (0) 791 2280 850
Email: bert.willborg@mtg.se (bert.willborg@mtg.se)