MediaForEurope, the TV group controlled by Italy’s Berlusconi family, has raised its takeover offer for German broadcaster ProSiebensat.1, valuing the German media company at roughly $2.4 billion.
Following a lowball offer in March – the terms of which were about to expire – MFE’s voluntary public takeover offer has now risen to €4.48 ($5.22) per share in cash and 1.3 newly-issued MFE-A shares for each ProSiebenSat.1 share. This values Prosieben’s shares at €8.15 ($9.51) based on the MFE-A stock’s price on the Euronext Milan Stock Exchange on Friday, according to ProSieben.
MFE is basically now offering €1.3 billion ($1.5 billion) for the 70% of ProSieben that it doesn’t already own. That marks a roughly 45% increase of the value of its initial bid.
MFE, which is headed by Pier Silvio Berlusconi — who is the son of the late former Italian Prime Minister and TV tycoon Silvio Berlusconi — and runs TV operations in Italy and Spain, has long been building a growing stake in ProSieben and plotting a ProSiebensat.1 buyout as part of its plan to create a pan-European advertising-funded network.
“Our proposal is industrial, not financial,” Berlusconi said in a statement. “What is needed is a push to build what is still lacking: a strong, locally rooted European group of sufficient size to compete globally This would allow us to combine markets, strengthen the editorial offering and generate new value for viewers and investors alike.”
He added that “the advantages are clear: in terms of costs, technology and, above all, revenue. All the while respecting editorial autonomy and national identities.”
ProSieben appeared to welcome the improved offer. “Following publication and review of the formal amendment of the offer, the executive board and the supervisory board will issue their respective legally required reasoned statement on the amended offer announced by MFE,” it said in a statement.
Meanwhile, according to several press reports, the German government has asked for a meeting with Berlusconi that is now scheduled for September, in what appears to be a preamble to Germany giving the Berlusconi family the greenlight for a Prosieben takeover.
Analysts, however, remain skeptical about the soundness of the vision behind this deal.
“They think they will be able to pitch global advertisers with a pan-European alternative to Google or YouTube,” said Francois Godard at Enders Analysis. “Well, they can always try. But even if you have Italy, Spain and Germany, you don’t have the whole of Europe.”
Godard added: “The takeover deal may not hurt if you add a small number of things like stability of ownership and maybe exchanging a bit more management. But this won’t change the big problem of what we do in digital and how we meet the challenge posed by the YouTubes of this world.”
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