ProSiebenSat.1: MFE and PPF Battle for Influence amid Diverging Strategic Visions
By Joachim Herr, Munich
Increased spectacle over genuine rivalry in the event
In a significant power play, major shareholders Media for Europe (MFE) and the Czech investment firm PPF are vying for the favor of ProSiebenSat.1's free float. Despite their partnership at last year's annual general meeting, both parties hold differing strategic visions for the media giant.
At the meeting, both MFE and PPF managed to push through alternative proposals for the election of the supervisory board. However, their contrasting views on ProSiebenSat.1's future strategy have since surfaced. The roots of their competition lie in discrepancies regarding the sale of the media and internet group's non-core participations and the potential formation of a European media alliance.
While ProSiebenSat.1's management, supervisory board, MFE, and PPF all concur that the company should focus on entertainment as its core business, disagreements revolve around timetables and the benefits of a European media alliance. MFE, led by CEO Pier Silvio Berlusconi, advocates for swift sales of non-core participations. In contrast, the management of PPF initially leaned toward swift sales but now sees a quick transaction as inadvisable.
Both parties agree that the price for any sale must be right, as pressure would strengthen the negotiating position of potential buyers. ProSiebenSat.1's CEO Bert Habets and CFO Martin Mildner seemingly appeased PPF with the recent sale of Verivox at a fair price to Multiply in Italy. The Flaconi online perfumery still remains on the sale list.
A more substantial point of difference lies in MFE's proposed Europe strategy. Berlusconi envisions a European media conglomerate that would serve as a counterweight to Amazon, Netflix, and other streaming giants, potentially including a joint streaming platform. However, Berlusconi's concept remains somewhat vague, and no other European media conglomerate is pursuing such an idea.
PPF, on the other hand, seeks to capitalize on bringing high-quality content to digital platforms and transforming linear television into a digital medium more quickly than before. They are already driving this transformation in various countries and language regions, and the digital platform is considered the cornerstone of their strategy.
PPF's Central European Media Enterprises (CME) is active in seven Central and Eastern European countries, with a total audience of 49 million people, less than the German market of ProSiebenSat.1 alone. PPF aims to be an equally strong shareholder as MFE, intending to aid in ProSiebenSat.1's digital expansion and strengthening of the core business with local content.
In response to MFE's takeover offer, PPF launched a counteroffer, offering shareholders €7.00 per share to increase their stake to a maximum of 29.99%. This move aims to match MFE's influence over the German media group. If successful, this would enable the management of ProSiebenSat.1 to focus more on its core tasks of expanding the digital offering and reinforcing the core business with local content.
The tension between MFE and PPF comes as both look to expand their influence over one of Europe's largest commercial broadcasters. The outcome depends on the shareholders' decisions amid the competing offers from each investor. While there are early-stage discussions of a potential joint bid between MFE and PPF, these talks remain preliminary.
- In the ongoing power struggle, both Media for Europe (MFE) and PPF are advocating different strategies for the future of ProSiebenSat.1's business, particularly in areas like investing in personal-finance technologies, digital expansion, and forming a European media alliance.
- MFE, led by CEO Pier Silvio Berlusconi, is promoting the idea of a European media conglomerate that could potentially include a joint streaming platform as a counterweight to streaming giants, while PPF is focused on capitalizing on high-quality content and transforming linear television into a digital medium.
- The disagreements between MFE and PPF also extend to their views on the sale of ProSiebenSat.1's non-core participations, with MFE advocating for swift sales and PPF initially favoring swift sales but now considering a quick transaction inadvisable.
