ProSieben shares plunge as Berlusconi-backed MFE bids low #NewsGerman

By Elvira Pollina and Klaus Lauer

MILAN/BERLIN (Reuters) -Shares in ProSiebenSat.1 fell sharply after the TV group controlled by Italy’s Berlusconi family made a low-ball bid to other investors in the German media group as part of a plan to strengthen its grip on the company.

The take-up for the bid, pitched at the minimum level allowed by German takeover rules, was likely to be limited but the move would allow MFE-MediaforEurope to gradually take control of ProSieben, analysts said.

Frankfurt-listed ProSieben shares fell as much as 11% to the expected offer price of 5.75 euros, meaning a valuation of around 1.3 billion euros ($1.41 billion). They recovered slightly to 5.90 euros later in the session.

MFE said it separately agreed to buy shares from an existing ProSieben investor that would take its 29.9% stake above the 30% threshold – the level which triggers a takeover bid – regardless of the outcome of the buyout offer.

The offer price “is completely unattractive. Who would accept that? The Italians are adhering to the legal framework and getting off lightly,”, said Daniela Bergdolt, vice president of DSW, an association representing small investors.

Since MFE first invested in ProSieben in 2019, the stock has lost more than half of its value.

With its stake over 30%, once the offer is concluded, “MFE will have the flexibility to buy further shares in the market without having to make a (further) mandatory bid,” JP Morgan analysts said in a note, explaining this would allow MFE to obtain “creeping control”.

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MFE, which has commercial TV operations in Italy and Spain, is looking to create a pan-European advertising-funded broadcaster – a strategy so far resisted by ProSieben, which is striving to remain independent.

However, MFE has not played a direct role in steering ProSieben’s strategy, despite its sizeable investment. It said a higher stake would help it to be more active in the future.

Sources familiar with the matter said German financial watchdog Bafin is expected to confirm the minimum statutory offer price at the beginning of next week.

MFE is preparing to file the formal offer document with Bafin at the end of April to start the tender in May, with the settlement expected in July, the people added.

MFE declined to comment, Bafin was not immediately available to comment.

“While the Pro7 share price may initially fall towards the MFE offer price, ProSieben’s share price in our opinion should benefit post the offer in the coming months from having MFE as an ongoing buyer,” the JP Morgan report added.