Top investor MFE seeks ProSieben asset split in M&A push

By Elvira Pollina

MILAN (Reuters) -MFE-MediaForEurope, the top investor in German broadcaster ProSiebensat.1, on Thursday asked for shareholders to be given a vote next month on a plan to spin off its e-commerce and dating assets.

The proposal could help MFE mount a potential buyout approach for ProSieben's TV business, which MFE sees as crucial for its ambitions to build a pan-European broadcaster.

Controlled by the family of the late former Italian Prime Minister Silvio Berlusconi, MFE already operates commercial TV businesses in Italy and Spain. It holds a nearly 30% stake in ProSieben.

"The implementation of the proposed spin-off would result in two separate listed companies, operated by their own independent management teams," MFE said in a statement.

In a letter to ProSieben, seen by Reuters, MFE said its "proposed resolution ... is intended to oblige the executive board to prepare a spin-off of the assets", which MFE wants to finalise next year.

Current ProSieben shareholders would also become investors in a separated listed-venture comprising dating and e-commerce operations, now consolidated in ProSieben, the letter showed.

MFE CEO Pier Silvio Berlusconi in an interview with Italian daily Corriere della Sera this week indicated that a buyout offer for ProSieben could only be possible once it spins off or sells its e-commerce and dating business.

In MFE's view, the asset split would increase "the attractiveness of each company" and address a "conglomerate discount" affecting Prosieben.

Shares in the German-listed company ended 1% up after rising more than 6% on Thursday. There was no immediate response from ProSieben which holds its annual shareholder meeting on April 30.

MFE said such proposed plan does not prevent Prosieben's executives from assessing any alternative options to split digital operations from TV business.

EUROPEAN EXPANSION

MFE sees cross-border deals as a way to tackle the growing dominance of U.S. streaming giants such as Netflix and the flight of advertising investment to the likes of Facebook and Google.

ProSieben, has however resisted MFE's calls to join the project and sought to develop a standalone strategy.

With Germany's economy struggling, it suffered a series of setbacks in 2023, slashing its dividend and lowering revenue targets before announcing a write-off on programming assets in December.

That prompted MFE to intensify calls on CEO Bert Habets to refocus on its core TV business and speed up a revamp of the company, whose shares have lost more than half of their value since MFE started building its stake in 2019.

MFE on Thursday also submitted other proposals for the AGM, including a request to vote upon the replacement of current supervisory board member Rolf Nonnenmacher.

It also asked for former Citi banker and M&A expert Leopoldo Attolico to be appointed as an alternative candidate to fill another supervisory board seat, a second letter seen by Reuters showed.

(Reporting by Elvira Pollina; editing by Giulia Segreti, Jason Neely, Keith Weir and David Evans)