ProSieben shares surge as CME owner makes offer

ProSiebenSat.1 shares have surged almost 20% after Czech Republic-based investment firm PPF IM confirmed it is looking to expand its stake in the German media giant.

PPF, which already owns CEE-focused operator Central European Media Enterprises (CME), is offering €7 per share in a bid to almost double its 15% stake in ProSiebenSat.1 to 29.99%, the uppermost legal limit at which it does not have to make a mandatory takeover offer.

ProSiebenSat.1 welcomed the offer from PPF, adding that it is in “full support” of the German company’s strategy under chief exec Bert Habets. 

That strategy has seen it selling off non-core assets including comparison website Verivox and refocusing on streaming via its Joyn service. The German operator has also been cutting staff, with 430 positions set to go in the latest round of redundancies.

PPF’s offer comes six weeks since the Berlusconi family’s Media For Europe confirmed it was launching a takeover attempt to gain control of ProSieben, offering around €5.70 per share in March.

That offer, which became available to shareholders from Friday, sent the German company’s shares down 10% in late March from €6.50 to around €5.80. PPF noted that its offer of €7 per share was at a 21% premium to MFE’s as of 9 May.

MFE has been in an ongoing battle to take ownership of ProSiebenSat.1 for more than five years, looking to create an operation based out of Italy, Spain and Germany that can compete with streamers.

PPF had also previously supported MFE in its calls for an acceleration in the shift to digital but has now shifted its stance, confirming its “continued support for the Executive Board and the execution of its strategy” in its note to investors.

While the deal would not give PPF control of ProSiebenSat.1, it would allow the company a greater say in its operations.

PPF’s ownership of CME already gives it considerable media clout in CEE, where it broadcasts almost 50 channels and operates regional streamer Voyo.

Habets said: “PPF has been a long-standing investor in ProSiebenSat.1 having a deep understanding of our business. The Executive Board is supportive of PPF’s increased commitment to ProSiebenSat.1, as evidenced by the terms of its offer, and appreciates its support for our digital transformation strategy.”

Jiří Šmejc, chief exec at PPF Group, said: “We put forward a compelling all-cash offer and intend to take a much more active role in the Supervisory Board going forward. We hope that this is appealing to shareholders and stakeholders alike and paves the way for unlocking the potential of ProSiebenSat.1.”

Didier Stoessel, chief investment officer at PPF Group, added: “We are a long-term investor and reliable partner to the companies we have invested in. Despite ProSiebenSat.1’s challenges and the turbulent market environment, I believe that the ProSiebenSat.1 management has the right strategy in place, which we fully support.

“I also believe that there is a general alignment among all stakeholders to divest non-core assets at the right valuation and execute the much-needed digital transformation of the core media segment.

“With a stronger shareholding and proportionate Supervisory Board representation, we will be in a position to more actively support the ProSiebenSat.1 management with our experience, namely in the digital revitalization of linear TV business models.”

ProSiebenSat.1 is valued at around €1.5bn, with shares falling from almost €50 apiece in 2015 to €7.14 as of press time, just above the PPF offer.

The company is led by chief exec Habets and operates numerous channels in Germany, Austria and Switzerland, including ProSieben, Kabel Eins and ProSieben Maxx.

It carries shows such as The Masked Singer and Germany’s Next Top Model, and also operates streamer Joyn and the Seven.One production division, which is behind Married at First Sight.

The company is also looking to appoint former ITV Studios and Paramount Group exec Maria Kyriacou as its chairwoman.