ProSiebenSat slaps Mfe (Fininvest) in Germany, here’s how and why

27 March 20241 month ago babelfish

ProSiebenSat rejects across the board the proposals of the largest shareholder, Mfe (Fininvest), to spin off non-core activities and reorganize the supervisory board. All the details

The administrative and supervisory boards of the German radio and television group ProSiebenSat.1 Media have rejected the proposals of the largest shareholder – namely MFE – MediaForEurope, led by Pier Silvio Berlusconi – for the restructuring of the company.

In short, the leaders of ProSiebenSat rejected both the proposal to spin off the non-core activities (i.e. dating sites and e-commerce), and those on the recomposition of the supervisory board, on the reduction of the authorized capital and on the modification of the constitutive Act.

MFE, founded by Silvio Berlusconi, is based in the Netherlands but is part of the Italian holding company Fininvest, which also controls Banca Mediolanum and Mondadori. MFE has control over Mediaset.

PROSIEBENSAT SAYS NO TO THE SPLIT-UP: IT ONLY PROMOTES MFE

According to MFE – the largest shareholder with a share of around 30 percent -, ProSiebenSat must distance itself from dating and e-commerce activities and focus on radio and television entertainment, the core business that generates the most revenues.

The management and supervisory boards, however, think that an operation of this type would cause a "significant increase in ProSiebenSat's financial debt up to 4.1 times the adjusted EBITDA, thus making both strategic acquisitions and a usual dividends”. Furthermore, the separation of secondary activities would "jeopardize […] the necessary further development of the company's core business in the medium term, preventing it from positioning itself in line with the market context and competitors".

Lastly, ProSiebenSat believes that the separation of the two divisions "would be in the sole interest of MFE, but not in the best interests of all other shareholders". The leaders of the German group rather recommend the "sale of the investments, maximizing their value in the next 12-18 months, depending on market conditions".

MFE seems to want to aim for the creation of a European free-to-air television hub.

THE RECOMPOSITION OF THE SUPERVISORY BOARD WAS ALSO REJECTED

MFE also proposed a renewal of the supervisory board, proposing Simone Scettri (formerly EY) to replace Rolf Nonnemacher. According to ProSiebenSat, the proposal could create “potential conflicts of interest” because the group has not yet decided whether to sue the consultancy EY over matters relating to the German Payments Code.

Furthermore, ProSiebenSat reports the risk of an excessive presence on the board of names linked to MFE and PPF, the Kellner family group owns 15 percent of the television company. Despite being the two largest shareholders, together MFE and PPF "do not represent the majority of the capital".

This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/prosiebensat-respinta-proposta-scorporo-mfe/ on Wed, 27 Mar 2024 15:24:40 +0000.