Exclusive-MFE got bank support for potential 4 billion euro ProSieben bid, documents show

By Elvira Pollina and Valentina Za

MILAN (Reuters) - MFE-MediaForEurope, the TV group led by Italy's Berlusconi family, held talks in recent months with various banks ready to fund a potential bid for German peer ProSiebenSat.1 worth up to around 4 billion euros ($4.3 billion), according to people close to the matter and documents seen by Reuters.

While MFE has indicated it could consider a buyout offer for ProSieben only once the latter shed its non-core assets, the endorsement by banks of a potential takeover strengthens MFE's hand in the shareholder battle the two broadcasters have engaged in ahead of ProSieben's annual general meeting (AGM) on April 30.

Dutch-based MFE is the single-biggest investor in ProSieben with a near 30% stake it started building in 2019 as part of plans to create a pan-European TV platform.

MFE wants ProSieben to divest its digital businesses and is seeking other shareholders' support for an AGM resolution to push the Bavarian group to start assessing a spin-off of its online assets, comprising e-commerce and dating services.

Though it has no plans at present to mount a buyout, MFE held discussions late last year and in early 2024 with lenders interested in financing a potential offer for the whole of ProSieben, the documents seen by Reuters showed.

A representative for MFE declined to comment.

BANK SUPPORT

Bank of America, Deutsche Bank and UniCredit would back a move by MFE, supporting both a tender offer for ProSieben shares and any debt refinancing needs triggered by the bid, the documents showed.

All three banks declined to comment.

UniCredit and Bank of America each offered to cover 100% of a potential deal with commitments, respectively, worth up to 3.7 billion and 3.2 billion euros, the documents showed.

Deutsche Bank would cover 50% of a deal whose value it estimated at 4 billion euros, according to a separate document.

The roughly 70% of ProSieben that MFE doesn't already own is worth around 1.2 billion euros at current market prices.

Shares in ProSieben, which are down nearly 60% over the past three years, have gained 20% since MFE unveiled its asset split proposal.

ProSieben shares extended gains on the Reuters report to close up 2.7%.

The Bavarian broadcaster also has 2.1 billion euros in gross debt which it may need to repay if its creditors opt to make use of a change of control clause in the lending contracts.

Frustrated with ProSieben's management and sustaining a paper loss on its investment, MFE is also seeking to name two members of ProSieben's supervisory board at the April 30 AGM.

ProSieben, which has always spurned MFE's pan-European ambitions, has billed the latest move by its top investor as hostile and not in the best interest of all shareholders.

MFE sees European expansion as the answer to the increasing dominance of the likes of Netflix or Facebook.

($1 = 0.9383 euros)

(Reporting by Elvira Pollina and Valentina Za; Editing by David Holmes)