MFE Plans to Increase Stake in ProSiebenSat.1

Italian media company MFE MediaForEurope is set to enhance its stake in the German television entity ProSiebenSat.1, seeking to take decisive control over its operations. The company, which is primarily associated with the family of former Prime Minister Silvio Berlusconi and currently holds 29.99% of ProSiebenSat.1, announced an official takeover bid on Wednesday evening.

MFE's CEO, Pier Silvio Berlusconi, expressed the necessity for a strong shareholder to contribute expertise and industry experience to facilitate ProSiebenSat.1's growth trajectory. He emphasized the urgency of creating value for all shareholders before it becomes too late.

ProSiebenSat.1 has stated that its board of directors and supervisory board will thoroughly evaluate the takeover offer, although this assessment may take several weeks to complete. It is anticipated that the offer will be below the current share price, as MFE plans to pay the three-month average share price. According to the announcement, 78% of the payment will be made in cash, while 22% will be in new shares of MFE's A stock.

Since December, the share price of ProSieben has fluctuated between EUR5.04 and EUR6.80, with the average price likely around EUR5.70, which is significantly lower than the closing price of EUR6.53 on Wednesday. Following reports of MFE's board deliberating on the offer, ProSieben's share price dropped by 7% to EUR5.96 in Frankfurt trading. The company's market valuation stands at approximately EUR1.5 billion.

MFE appears to prioritize surpassing the 30% ownership threshold rather than amassing a larger quantity of shares, allowing them to avoid a more expensive mandatory offer later. This threshold is already secured, as a currently unnamed shareholder has agreed to sell a portion of their shares to MFE. This agreement provides MFE the freedom to gradually increase its ownership percentage.

The second-largest shareholder of ProSieben is the Czech firm PPF, which holds nearly 13% of shares. MFE aims to integrate ProSiebenSat.1 into a broader European television conglomerate, having established operations in both Italy and Spain. Historically, since entering the German market in 2019, the Berlusconi family has faced some resistance from ProSiebenSat.1. However, the dynamics began to shift with the appointment of current CEO Bert Habets in late 2022.

As a shareholder, MFE has been actively pushing for changes in ProSiebenSat.1's management strategies through its influence on the supervisory board. They have advocated for divesting non-core segments, such as the comparison portal Verivox, to generate capital. Berlusconi noted that many operators, convinced of the decline of television, have diversified into other sectors, particularly digital, and are now facing difficulties. Recently, Verivox was sold for at least EUR232 million to the Italian company Moltiply, while the online perfume retailer Flaconi is still on the market.