German broadcaster to sell assets but opposes pressure for breakup

Milan — Amber Capital will back a strategy shift at ProSiebenSat.1 put forward by the German broadcaster’s top investor MFE-MediaForEurope at a shareholder vote later this month, a senior executive at the activist fund said.

MFE, which holds nearly 30% of ProSieben, is proposing splitting the group’s e-commerce and dating assets from its core TV operations in an effort to speed up a long-awaited revival at the Bavarian broadcaster.

Controlled by the family of the late Italian prime minister Silvio Berlusconi, MFE is Italy’s biggest commercial broadcaster and an advocate of pan-European consolidation in the sector.

MFE is seeking shareholder support for its proposal, which has been rejected by the Munich-based company, before a vote on it at ProSieben's AGM on April 30.

“We will support MFE’s proposal at the AGM as we believe it is the only way to create value for shareholders,” said Joseph Oughourlian, chair and founder of Amber Capital.

ProSieben shares, which have dropped 58% over the past three years, were up 3% at 9.07 GMT (11.07am), having hit their highest since late August.

ProSieben declined to comment.

Oughourlian said Amber held about 1% of ProSieben, partly via derivatives. Based on LSEG data, that makes it a top 15 shareholder.

It is the first significant investor to comment publicly on MFE’s proposal.

Oughourlian did not rule out Amber buying more ProSieben shares before the AGM, “depending on the market price”.

The fund would also vote for other MFE proposals, including its candidates for the German group’s supervisory board, he said.

MFE, which also runs a Spanish TV business, started building its ProSieben stake in 2019 as part of a pan-European drive to counter US giants such as Netflix and Google.

ProSieben has spurned MFE’s calls to join the project. However, with the German economy in the doldrums, it has been forced to slash dividend payments and lower its revenue targets before announcing a write-off on programming assets in December.

Oughourlian said Amber’s investment in ProSieben had been a “disappointment” and the fund had lost confidence in management.

“MFE’s proposal makes total sense while ProSiebensat’s management has not offered any valid alternative,” he said.

‘Thumbs-up’

Oughourlian said a 20%-plus rebound in ProSieben’s shares since MFE unveiled its plans showed widespread support.

“We believe that also other institutional shareholders will back the proposal … the market has clearly given it a thumbs-up,” he said.

MFE said on Monday its proposal laid the ground for an eventual spin-off of the noncore assets by promoting an analysis and preparatory work so that management could focus on the core entertainment operations.

MFE has said an asset split could eventually lead it to make a buyout approach for ProSieben’s TV business.

“If MFE offers an adequate price to take control of ProSieben’s media business we would be happy after years of underperformance of the stock,” Oughourlian said.

Reuters