Advanced Television

KKR boosts ProSiebenSat.1 stake

June 25, 2020

Germany’s ProSiebenSat.1 has acquired the free-to-air domestic TV broadcast rights package of the (DFL) Bundesliga football games for the 2021-2025 seasons. Sky Deutschland won five of the seven pay-TV packages.

Perhaps coincidentally, private equity giant KKR increased its stake in ProSiebenSat.1 and now holds 6.61 per cent. Earlier KKR acquired a 5.21 percent stake as at May 12. The extra shares cost KKR some €31 million.

KKJR says it views the shareholding as a financial investment.

Deutsche Bank, in a note to clients, said: “As a reminder, KKR has stepped up its investment in German media after it acquired a majority stake in Axel Springer and then took it private along with the controlling shareholders. Furthermore, there is history between both firms; in 2005, Axel Springer had unsuccessfully tried to acquire ProSieben with the aim of bringing together the Springer’s print platforms (newspapers Bild and Die Welt) with the television assets of ProSieben.”

The bank adds that proposed deal was blocked by Germany’s Federal Cartel Office. With KKR’s latest investment, one could argue tha:

1) KKR might re-attempt to combine Springer’s legacy print advertising businesses (excluding large classifieds assets) with Pro7’s TV and digital advertising platform to create a larger media operation or that

2) KKR might seek a demerger of ProSieben’s commerce business (Nucom) with its core Entertainment and Content production businesses, and then pursue a merger of the standalone e-commerce entity with Springer’s online assets to achieve better synergies.

“However, Pro7 has also been of interest to the Mediaset Group which has increased its voting rights to ~25 per cent of the group. Overall, we believe that P7’s large shareholders i.e. KKR (with 6.61 per cent voting shares), Mediaset Group (24.9 per cent), and CMI (10 per cent) increasing their stake individually in the German broadcaster [and] is positive for P7’s share price,” said Deutsche Bank.

The news will be welcome for shareholders. ProSiebenSat.1 shares had fallen by some €2 since its AGM barely two weeks ago on June 10th. At that time Pro7 management told shareholders that its June advertising looked pretty much like April and May, both of which were some 40 per cent lower than last year.

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