The supervisory board of ProSiebenSat.1 is set to convene on March 16 to explore a potential agreement that could grant U.S. private equity firm General Atlantic a minority share in the German broadcaster, according to two sources familiar with the situation who spoke to Reuters.
General Atlantic is already a co-investor in ProSieben's online entities—Verivox, Flaconi, and ParshipMeet Group—a set of assets that the broadcasting corporation is seeking to divest.
ProSieben recently announced plans to purchase General Atlantic's minority interests in ParshipMeet and NuCom Group, the parent company of Verivox and Flaconi, using a mandatory convertible bond or potentially treasury shares as a form of payment. This move would enable ProSiebenSat.1 to become the sole proprietor of the digital properties, circumventing General Atlantic's current veto power over the proposed sales of Verivox and Flaconi.
Sources suggest that ProSieben is contemplating employing a 'contingent' capital increase to bypass the necessity of a shareholder vote for issuing the shares integral to the mandatory convertible bond.
Both ProSieben and General Atlantic have declined to provide any official comments on the matter.
The utilization of the 'contingent capital' alternative could lead to the dilution of ProSieben's current shareholders' interests, notably MFE-MediaForEurope, the leading investor that possesses nearly 30% of ProSieben, just below the threshold triggering a mandatory bid under German laws.
MFE, a company controlled by the Berlusconi family of Italy, has secured a 3.4 billion euro financial package to support a potential acquisition of ProSieben, which it might undertake later this year to expand an advertising-supported European broadcasting network.
In the event of MFE obtaining over a 50% voting stake, part of the financial package would be utilized to repay 2.1 billion euros in gross debt owed by ProSieben. A 'change of control' provision within the debt agreements empowers ProSieben's creditors to enforce this repayment.
On Friday, ProSieben held a market cap of 1.4 billion euros.