MFE-MediaForEurope, the TV group controlled by Italy's Berlusconi family, has called a board meeting on Wednesday to discuss a potential bid for German rival ProSiebenSat.1, according to three sources familiar with the matter.
MFE, which operates in Italy and Spain, has built nearly a 30% stake in ProSieben as part of a strategy to create a pan-European advertising-funded broadcaster. The company views European expansion as a response to the growing dominance of U.S. streaming giants like Netflix and the diversion of advertising budgets to tech powerhouses such as Facebook and Google.
ProSieben, which also operates in Austria and Switzerland, has thus far resisted MFE's proposals to join its pan-European initiative, aiming to maintain its independence.
MFE's board will review two alternative strategies concerning ProSieben, as per the anonymous sources. Both options involve increasing MFE's stake in the Bavarian media company, although further details were not disclosed.
MFE and ProSiebenSat.1 declined to comment.
Shares in ProSieben rose 5% in early trading, while MFE shares opened up 0.3% in Milan. MFE’s current stake is just below the 30% threshold that, under German law, would trigger a mandatory buyout offer if exceeded. Presently, a voluntary offer to acquire more of ProSieben is also a possibility.
The decision on whether to proceed with a bid will rest with the board. Any potential bid is expected to be launched before ProSieben’s annual general meeting on May 28.
MFE is arranging a €3.4 billion financing package to facilitate a potential takeover of ProSieben. Part of this funding will be required to refinance up to €2.1 billion in gross debt that ProSieben may need to repay if MFE secures over a 50% voting stake, as indicated by a "change of control" clause in ProSieben's debt contracts.
ProSieben's market value is approximately €1.5 billion at Tuesday’s closing price, nearly halved since MFE first invested in the company in 2019. This month, MFE also plans to divest some of its digital assets, a move that could streamline the business and facilitate an offer.