Milan/Munich — MFE-MediaForEurope (MFE), the TV group controlled by Italy’s Berlusconi family, on Monday improved its cash-and-share offer for German peer ProSiebenSat.1 as it pursues plans to build an advertising-funded pan-European broadcaster.
With streaming giants such as Netflix and Amazon Prime Video encroaching on legacy broadcasters, MFE sees cross-border deals as vital to withstand competition.
“What is needed is a push to build what is still lacking: a strong, locally rooted European group of sufficient size to compete globally,” MFE CEO Pier Silvio Berlusconi said in a statement.
MFE boosted the share component of its initial bid, unveiled in March, and is now offering €1.3bn for the 70% of ProSieben it doesn’t already own, with a 45% increase in the bid’s value based on Friday’s closing prices.
The improved offer is higher than an all-cash counter-bid by ProSieben’s second largest investor PPF.
MFE is offering 1.3 MFE A shares for each ProSieben share tendered, with the cash component unchanged at €4.48.
Shares in ProSieben jumped 10% on Monday to €7.76, while MFE A shares fell 5%, which implies the bid values each ProSieben share at €7.96.
Czech conglomerate PPF, which owns private TV stations across six East European countries, in May offered €7 for an up to 29.99% stake in the German broadcaster.
A source familiar with PPF’s thinking said MFE’s bid remained unattractive for many ProSieben investors, given it contained just more shares and with lower voting rights compared with MFE’s privileged shares. PPF declined to comment.
Scrutiny
MFE’s bid for Munich-based ProSieben has drawn scrutiny from the German government.
“A majority shareholding by MFE should not lead to a restriction of journalistic and economic independence and should not jeopardise Germany as a business location,” a German government spokesperson said on Monday, echoing concerns expressed by culture minister Wolfram Weimer.
In announcing the improved offer on Monday, the MFE CEO, the son of the late former Italian prime minister Silvio Berlusconi, said it would stick to pluralism, freedom of information and employment protection.
Formulate
Berlusconi is due to meet the culture minister in Berlin after the summer break to discuss ProSieben. A person familiar with the matter said MFE had informed Berlin of its plan to raise its bid ahead of a weekend board meeting.
MFE, which first invested in ProSieben in 2019, runs commercial TV operations in Italy and Spain.
ProSieben, which has so far strived to remain independent, on Monday welcomed MFE’s improved offer, adding its board would formulate a proper opinion in due course.
ProSieben CEO Bert Habets said the company is supportive of “a pan-European project, working closely together also with MFE” adding it would assess value creation potential mentioned by MFE, which expects any potential tie-up with German rival to add up to €419m a year to operating profit.
In a battle to catch up with US heavyweights, European broadcaster RTL, which has large TV operations in Germany, last month announced an agreement to buy the local operations of pay TV group Sky.
Reuters
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