The supervisory board of ProSiebenSat.1 in Berlin/Milan has paused discussions regarding a prospective agreement that could grant U.S. private equity firm General Atlantic a minority stake in the German broadcaster, as indicated by sources informed of the matter on Monday.
General Atlantic is a joint investor in ProSieben's internet subsidiaries – price comparison site Verivox, perfume e-retailer Flaconi, and online dating platform ParshipMeet Group – all of which the television company is considering selling.
Earlier this month, ProSieben announced plans to negotiate the purchase of General Atlantic's minority interests in ParshipMeet and in NuCom Group, which houses Verivox and Flaconi, by issuing a mandatory convertible bond as payment.
Nonetheless, on Sunday, ProSiebenSat.1's supervisory board withheld the necessary endorsement for the potential agreement with General Atlantic. The board requested management to renegotiate under different terms before reconsidering the deal, sources revealed.
A statement from ProSiebenSat.1 acknowledged that it is still evaluating specific elements of the deal and has not reached a final decision.
The proposed arrangement with General Atlantic would enable ProSiebenSat.1 to become the exclusive owner of the digital assets, thus eliminating a barrier to the prospective sales of Verivox and Flaconi, which General Atlantic currently has the authority to obstruct.
An essential point scrutinized by the supervisory board was the terms of a so-called "contingent" capital increase, a provision permitting the company to issue up to 23.3 million shares, equivalent to 10% of its share capital, per the sources.
The contingent capital provision could result in the dilution of stakes held by ProSieben's current shareholders, notably top investor MFE-MediaForEurope, with close to a 30% stake in ProSieben, just below the threshold stipulated by German law that necessitates a mandatory bid.
Both General Atlantic and MFE declined to provide comments.
MFE, under the control of the Berlusconi family in Italy, has secured a 3.4 billion euro financing arrangement to support a potential acquisition of ProSieben, a move it may undertake later this year as part of its strategy to establish an ad-supported European broadcaster.