Equity groups lead bid for ProSieben
Italy's Mediaset eliminated from auctionPrivate equity groups look likely to win out in the bidding for Haim Saban's German broadcaster ProSiebenSat.1 after Italy's Mediaset was eliminated from the auction.
The Mediaset news and the release of disappointing third-quarter figures on Thursday hurt ProSieben's shares, which fell 5.2% to € 22.81 ($29.28).
Revenue at the Munich-based group increased by 3.7% in the third quarter to € 431.3 million ($551 million), but its profit tumbled to just € 13.1 million ($16.7 million), compared with € 44.7 million in the year-ago period.
In a conference call, ProSiebenSat.1 CEO Guillaume de Posch blamed the drop on a decision to pay off a € 200 million ($256 million) loan earlier than expected. But he insisted ProSieben had "the wind at its back" thanks to a rebound in the German advertising market and the launch of several new media ventures, including video-on-demand service maxdome and two new digital pay TV channels.
De Posch said sales growth at ProSieben would outpace the overall market, forecasting 5%-6% revenue growth this year, compared with an expected 2%-3% for the industry.
Saban and Co. have reportedly received around 10 non-binding bids. According to sources, they include ones from Goldman Sachs' investment arm and private equity group Permira.
Sources near the negotiations confirmed media reports that Mediaset has been taken off the list of potential ProSieben bidders due to "political concerns."
German politicians of all stripes have come out against a takeover of the country's largest commercial broadcaster by Mediaset, which is controlled by Italian billionaire and former Prime Minister Silvio Berlusconi. "Regulators and politicians don't want to see Berlusconi move into the German market," the source said. "A Mediaset bid would have been highly problematic."
The image of Berlusconi in the German media is that of a corrupt and power-hungry populist. Many Germans have not forgotten his comments in 2003, when comparing a German legislator to a concentration camp commandant.
Mediaset confirmed Thursday that it has not been accepted into the next round of bidding for ProSieben.
ProSieben and two Saban spokeswomen declined comment Thursday, but sources said some of the bids were for more than € 30 ($38) a share. That compares to the € 23.37 ($30) a share German publisher Axel Springer offered earlier this year in a deal that failed.
Saban and his private equity investors, which include Bain Capital, Providence Equity Partners, Thomas H. Lee and Hellman & Friedman, hold 88% of ProSieben's voting shares. The price tag for full control of ProSieben is likely to top $6 billion.
Scott Roxborough reported from Cologne, Germany. Eric J. Lyman reported from Rome.