Italian media giant MFE-MediaForEurope is set to take control of German broadcaster ProSiebenSat.1 as Czech investment firm PPF, a rival suitor for ProSieben, has thrown in the towel and agreed to sell its stake in the company to MFE. The deal means MFE holds nearly 60 percent of ProSieben’s stock, making it the majority shareholder and ensuring it has enough power to win any votes which require a simple majority.
The two companies had both put in competing tenders for ProSieben shares, with MFE pushing for a full takeover and PPF simply aiming to increase its stake in the broadcaster. Both companies fell short of their goals in the initial acceptance window: MFE secured a 43.57 percent holding in the company, compared to PPF’s 18.41 percent.
MFE’s bid wasn’t over yet. Unlike PPF, MFE has an additional acceptance window which closes on September 1st, meaning there is still time for shareholders to sell their stake in ProSieben to MFE under the terms of the offer. But PPF’s decision means that regardless of what happens before September 1st, MFE has the critical mass of ProSieben’s stock.
In a statement, PPF said that since MFE has secured more than 43 percent of ProSiebenSat.1 voting rights, it likely had a large enough shareholding to secure a simple majority at every ProSieben shareholder meeting. At the same time, the limited acceptance of PPF’s offer “makes it impossible for PPF to continue its original role as a strategic investor, engaging with MFE on equal terms and contributing its expertise in building digital broadcasting media platforms,” according to the statement.
Still seeking 75 percent
MFE’s executives including CEO Pier Silvio Berlusconi have frequently spoken about the company’s desire to build a pan-European broadcasting giant. MFE believes that scale is key, and that a large TV business that can provide pan-European reach to advertisers will be able to more effectively compete with the international tech giants and streaming platforms than any individual broadcaster can on their own.
It made some progress towards this goal by successfully completing the full merger of Mediaset España into MFE a few years ago. ProSieben appeared to be its next target, as it had been building up its stake in the business since first acquiring nearly ten percent of ProSieben shares in 2019.
There have been roadblocks along the way. MFE has tried to persuade ProSieben to sell off all of its non-core business units, a move which would have made a takeover easier. ProSieben successfully fought off MFE’s proposal in the boardroom, though it has since sold off a few of its non-core businesses.
ProSieben itself has softened its stance since MFE sweetened its full takeover bid earlier in the summer, recommending that shareholders accept MFE’s offer. There’s still been resistance elsewhere though, with Germany’s DJV journalists’ association imploring shareholders not to sell to MFE, claiming that the Italian group would impose a “right-wing populist agenda” on the German broadcaster.
These efforts could still prove significant. While MFE has secured a simple majority of voting rights, it will likely be keen to reach a 75 percent stake in the company by the end of the acceptance period. This would give it full power to enter a domination agreement, allowing it to issue binding instructions to ProSieben’s management board, and a profit and loss pooling agreement, which would see ProSieben’s annual financial reporting consolidated within MFE’s own reporting.
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