Klaus Lauer and Rachel Mohr
BERLIN (Reuters) – German broadcaster ProSiebensat.1 on Wednesday opposed MFE-MediaForEurope’s plan to break up the company and called on shareholders to vote against proposals from major investors at its annual general meeting next month.
MFE, controlled by the family of late former Italian Prime Minister Silvio Berlusconi, wants to spin off ProSieben’s e-commerce and dating assets from the company’s core TV operations.
The plan could help MFE pursue a potential approach to buying out ProSieben’s television business, which MFE views as crucial to its ambitions to create a pan-European broadcaster.
“In the opinion of the executive and supervisory boards, the separation… is in the unique interests of MFE but is not in the interests of all other shareholders,” ProSieben said in a statement.
The separation will result in a significant increase in ProSiebenSat.1’s financial leverage “and thus make strategic acquisitions as impossible as a normal dividend policy,” the company added.
ProSieben’s annual general meeting is scheduled for 30 April. A 75% majority is required to approve the proposed allocation.
MFE already operates a commercial television business in Italy and Spain. She owns almost 30% of ProSieben shares.
The Milan-listed media company is eyeing cross-border deals as a way to cope with the growing dominance of US streaming giants such as Netflix (NASDAQ: ) and the exodus of advertising investment into companies such as Facebook (NASDAQ: ) and Google (NASDAQ: ).
ProSieben, however, resisted calls from MFE to join the project and sought to develop a separate strategy in which management pursued the sale of certain investments in the Commerce & Ventures and Dating & Video segments in an attempt to reduce debt.
Both boards “plan to have a clear focus on selling their respective investments to maximize value over the next 12 to 18 months, depending on market conditions,” ProSieben said.