Bidders make move for ProSieben
No front-runner emerging; deal could be signed by week's endCOLOGNE, Germany -- The multibillion-dollar auction of Haim Saban's German broadcaster ProSiebenSat.1 is coming down to the wire.
The three suitors circling the Teutonic TV giant -- Turkish media mogul Aydin Dogan's Dogan Yayin Group and private-equity consortia KKR/Permira and Apax/Goldman Sachs -- must submit binding bids for ProSieben by today. A deal could be signed later this week.
The bidders are in a dead heat, with no front-runner emerging, sources close to the negotiations said Monday.
The price for the 50.5% stake in ProSieben held by Saban and his private-equity partners is expected to come in at about €30 ($40) a share, sources said, a price that would value the Saban stake at more than $4 billion.
Any successful bidder would also, under German law, be required to make a buyout offer to ProSieben minority shareholders. Based on a three-month moving average, the offer would be about €22.50 ($30) a share, valuing all of ProSiebenSat.1 at about €6 billion ($8 billion).
ProSiebenSat.1 shares closed up 1.3% on Monday at €23.53 ($31.18). The stock's 52-week trading range stands at €15.37-€24.40.
To compare, when Saban and his investors acquired their majority stake in ProSiebenSat.1 in 2003, they paid just €7.50 a share for the broadcaster.
While Saban and his private-equity partners have been playing one bidder against another to push up ProSieben's price tag, the bidders reportedly have launched covert sabotage efforts questioning their competitors' real motives.
Dogan Yayin has come in for some of the harshest criticism in the German media. The Turkish media group has been accused of wanting to use ProSieben to influence the German government's policies toward Turkey, particularly as Turkey makes a bid to enter the European Union.
Another widely reported rumor in the local media is that Dogan is serving as a middleman for German publisher Axel Springer.
German publishing giant Springer holds a 25% stake in Dogan Yayin's subsidiary Dogan TV, as well as a 12% stake in ProSieben. The company tried to take over ProSieben this year, but the deal was blocked by German antitrust watchdogs, which were concerned about a concentration of print and TV power in Soringer's hands.
Dogan has tried to allay fears of a Turkish takeover by pledging, should its bid be successful, to sell off a 25% stake in ProSieben to an unnamed German company.
For its part, Axel Springer is keeping its options open. After a takeover deal is signed, Springer would consider "all three of our options," a company spokeswoman said Monday. Springer could either hold its 12% stake in ProSieben, increase it by buying stock or sell it off entirely.
If KKR and Permira are successful in their ProSieben bid, the group is expected to merge the German broadcaster with pan-European TV company SBS Broadcasting, which the private-equity firms acquired this year. An SBS-ProSieben merger would create Europe's second-largest broadcaster, behind Bertelsmann AG-controlled RTL Group.
After acquiring ProSieben, KKR and Premira likely will make an offer to sell SBS to the German group.
On paper, an SBS-ProSieben merger makes strategic sense. SBS is strong in the smaller European markets of Scandinavia, Benelux and Eastern Europe, but lacks a footprint in a big market like Germany.
ProSieben's channels have a 30% audience share and command about 45% of the country's advertising market but the company has no significant presence outside of German-speaking Europe.
Critics of the KKR/Premira bid warn that ProSieben shareholders could be tricked into paying too much for SBS because KKR/Permira would, in effect, be both buyer and seller in such a deal.
The last group in the bidding trio, Apax and Goldman Sachs, are no strangers to the German TV market. The private-equity investors previously were part owners of Germany's largest cable operator, Kabel Deutschland.
They have been active in trying to jointly buy up European media companies. In March, Apax and Goldman Sachs, together with the Blackstone Group, made an unsuccessful bid for U.K. broadcaster ITV Plc.
Any deal to acquire ProSieben still will have to be approved by German media and cartel authorities.