By Elvira Pollina and Ludwig Burger
MILAN/FRANKFURT (Reuters) -MFE-MediaForEurope, the TV group controlled by Italy’s Berlusconi family, said on Thursday it secured more than 75% of German peer ProSiebenSat.1 following a takeover that sets it up to become Europe’s largest free-to-air broadcaster.
MFE, which already has TV operations in Italy and Spain, sees European expansion as crucial for its traditional broadcast business to compete for viewers and advertising spending against U.S. streaming giants including Netflix and Google’s YouTube.
With a 75.6% stake after a cash and share bid valuing ProSieben at 1.8 billion euros ($2.11 billion), MFE can now advance plans to integrate the German media company, which also operates in Austria and Switzerland, into its existing business.
MFE, run by CEO Pier Silvio Berlusconi, had built its stake since 2019, reaching a level of nearly 30% before launching a takeover bid earlier this year.
“MFE has a concrete industrial project: we approach it with realism and prudence, knowing that it will not be easy and that much remains to be done”, Berlusconi said in a statement.
A EUROPEAN BROADCAST GIANT
Research firm Enders Analysis estimates the deal will make MFE Europe’s biggest free-to-air broadcaster, with revenues of 6.8 billion euros.
The Milan-listed company forecast a full combination of the two businesses would ultimately add up to 419 million euros in annual operating profit within four years and allow it to attract global brands aiming to deploy cross-border ad campaigns.
“On paper this makes sense, though hard figures on the spending of global advertisers would put flesh onto the theory”, Enders’ analyst Francois Godard said in a report.
“Together, the MFE channels and online services could generate in the region of 10% of total traditional TV audiences of the EU, a figure by any account way ahead of YouTube’s TV screen score”, he added.
ProSieben has lacked a core shareholder and struggled to craft a standalone strategy following a failed push into tech that included ventures like online dating, which MFE repeatedly called for it to sell.
It had come under pressure due to falling advertising revenue in recent years, partly due to Germany’s economic downturn.
MFE had already effectively secured a majority in ProSieben last week after Czech group PPF, the second-largest investor, said it would tender its stake to MFE after its alternative bid for an up to 29.99% stake failed to attract investors.
Following MFE’s regulatory filing on its public takeover offer for the German broadcaster published on Thursday, shares in MFE extended gains and were up 5.6% at 1130 GMT. ProSieben’s shares also rallied and were up nearly 8%.
Under German market rules, having more than 75% of voting rights would allow MFE to enter into a contract with ProSieben that gives it full access to its earnings.
($1 = 0.8542 euros)
(Reporting by Ludwig Burger and Elvira Pollina, additional reporting by Klaus Lauer in Berlin; Editing by Friederike Heine, Tomasz Janowski and Joe Bavier)
