KKR/Permira make winning ProSieben bid


Private-equity giants Kohlberg Kravis Roberts & Co. and Permira Advisers won the auction for ProSiebenSat1 on Thursday, inking a €3.1 billion ($4 billion) deal to acquire 50.5% of the German pubcaster from Haim Saban's German Media Partners (HR 12/15). They plan to merge it with pan-European network SBS Broadcasting.

"Our goal, clearly, is to become the No. 1 broadcaster in Europe, ahead of the RTL Group," Johannes Huth, head of KKR's European operations, said Friday.

SBS, which KKR and Permira acquired last year in a deal valued at €1.7 billion, already is Europe's second-largest broadcaster but the company is considerably smaller than Bertelsmann-controlled RTL.

While RTL has channels in Germany, the U.K., France and Spain, SBS has a presence only in Europe's smaller markets: Scandinavia, Benelux and Eastern Europe.

ProSiebenSat.1 is Germany's top commercial broadcaster, controlling five free-TV and two pay TV channels and a roughly 45% share of national TV ad revenue.

Huth said a merged ProSieben/ SBS will focus on acquiring channels in the "developing markets" of Central and Eastern Europe.

The rapidly expanding television landscape in the former Eastern Bloc will be the future battleground for Europe's mega broadcasters. RTL also has been aggressive in the region, buying stakes in TV channels in Russia (Ren TV), Croatia (RTL Televizija) and Hungary (RTL Klub).

Permira and KKR plan to sell SBS to ProSiebenSat.1 once their takeover agreement is approved by German antitrust authorities, something the companies said they expect in first-quarter 2007.

Permira and KKR agreed to pay Saban and his investors €28.70 ($37.60) a share for ProSiebenSat.1 common stock, which has voting rights, and €22.4 ($29.3) a share for nonvoting preferred shares.