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Berlusconi-backed MFE strengthens grip on Germany's ProSiebenSat

FILE PHOTO: FILE PHOTO: The logo of German media company ProSiebenSat.1 in front of its headquarters in Unterfoehring

By Elvira Pollina

MILAN (Reuters) -Italian broadcaster MediaForEurope (MFE) has raised its potential voting stake in ProSiebenSat.1 Media to 29.9%, cementing its position as the German media group's single biggest shareholder.

Controlled by the family of former Italian Prime Minister Silvio Berlusconi and formerly known as Mediaset, MFE has long seen tie-ups among European peers as the answer to stiff competition in the industry from online video giants.

The potential stake, disclosed late on Wednesday, is just below the 30% threshold which under German law would trigger a mandatory buyout offer. Both MFE and ProsiebenSat.1 shares were little changed on Thursday.

MFE's move comes at a time when broadcasters face additional challenges from online streaming giants such as Netflix which is launching an ad-supported service to target a global TV advertising market estimated to be worth $153 billion.

Milan-listed MFE, which began investing in the German company in 2019, said it had secured an additional stake of up to 4% in ProSiebenSat.1 through financial instruments, which would take its voting stake to 29.9%.

The company did not disclose the financial details of the transaction. Reuters' calculations based on Refinitiv data show that a 4% stake is worth around 66 million euros at current market prices.

According to a regulatory filing, the broadcaster now controls 29.0% of the German media group's total capital, of which 22.72% directly and 6.28% through financial instruments.


The move piles pressure on ProsiebenSat.1, whose share price has plunged by 50% this year and which has cut its 2022 financial targets after appointing a second head in the span of two years, with former RTL's boss Bert Habets succeeding Ranier Beaujean this month.

ProsiebenSat.1 declined to comment.

The Munich-based group has showed little interest so far in MFE's call for closer cooperation focused on their core TV business, pursuing instead a standalone strategy and also investing in tech businesses such as e-commerce and online dating.

The stakebuilding could give MFE a bigger say over the German company's strategy while a full takeover offer was not on the cards at present, analysts say.

"We do not believe that MFE intends to launch a takeover on ProsiebenSat.1, at least for now," Intesa Sanpaolo analyst Antonella Frongillo said in a report.

"We rather think that it intends to enhance its governance powers on the company, especially after the recent change of CEO... and ahead of the next round of renewals in the composition of the supervisory board", Intesa added.

MFE does not have a representative on the company's governance bodies.

Bavaria's government has expressed concerns over MFE's investment in ProsiebenSat.1, with premier Markus Soeder calling for the German group to remain an independent media player, according to local media reports last month.

(Reporting by Elvira Pollina, additional reporting by Alexander HuebnerEditing by Chris Reese and Keith Weir)