(Bloomberg) -- MFE-MediaForEurope NV, the broadcaster owned by Italy’s Berlusconi family, is reviewing options around its holding in ProSiebenSat.1 Media SE, including the possibility of boosting its nearly 30% stake.
MFE Chief Executive Officer Pier Silvio Berlusconi is considering making a move as soon as next month if ProSieben’s third-quarter results don’t show sufficient progress on hitting its targets, people familiar with the matter said. If that happens, MFE may decide to raise its stake in ProSieben and then kick off a mandatory takeover offer, they said.
MFE shares fell as much as 3.4% in Milan and traded down 1.4% at 2:18 pm local time. ProSieben shares rose as much as 7.2% following the initial Bloomberg report.
Under a mandatory general offer, the bid price would be the average of ProSieben’s share price over the past three months, which is currently equivalent to around €6 per share, said the people, asking not to be identified because the deliberations are confidential. ProSieben shares fell 2.5% to €5.69 at 2:04 p.m. Thursday in Frankfurt, giving the company a market value of €1.3 billion ($1.5 billion).
MFE first acquired a ProSieben stake in 2019 and has gradually increased its holdings to become the biggest shareholder. Berlusconi has repeatedly said he’s unhappy with ProSieben’s performance and strategy. In June, he said the German company was “in a delicate moment” and that management needed to “hurry up” in cutting debt and selling non-core assets.
ProSieben is set to report its quarterly results on Nov. 14. In September, MFE said it expects ProSieben to show an improvement in net profit, cash generation and debt reduction this year compared to 2023.
The German company confirmed its forecasts in August, saying it aims to boost revenue for the year to around €3.95 billion and expects adjusted earnings to be in line with 2023 levels. It expects a leverage ratio of 2.5 to 3 times at the end of 2024, according to ProSieben’s latest annual report.
Other options under review by MFE include a voluntary offer and a stock-for-stock combination, according to the people. No final decision has been made and MFE could still decide to postpone its plans, they said. Representatives for MFE and ProSieben declined to comment.
Founded in the late 1970s by the late tycoon-turned-politician Silvio Berlusconi, MFE is Italy’s largest commercial broadcaster, dominating the country’s TV ad market with a 56% share.
--With assistance from Eyk Henning.
(Updates with shares in third paragraph.)
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