By Elvira Pollina, Andrea Mandala and Amy-Jo Crowley
MILAN (Reuters) -MFE-MediaForEurope, the TV group controlled by Italy’s Berlusconi family, has called a board meeting on Wednesday to review a possible bid for German rival ProSiebenSat.1, three sources with knowledge of the matter told Reuters.
MFE, which runs TV operations in Italy and Spain, has built a near 30% stake in ProSieben as part of a strategy to create a pan-European advertising-funded broadcaster.
MFE sees European expansion as the response to the increasing dominance of U.S. streaming giants such as Netflix, and the flight of advertising budgets to the likes of tech powerhouses Facebook and Google.
ProSieben, which also operates in Austria and Switzerland, had so far resisted MFE’s calls to join its pan-European project, striving to remain independent.
MFE’s board on Wednesday will review two alternative moves on ProSieben, the sources said, speaking anonymously because the matter is confidential.
They said both options involved MFE increasing its holding in the Bavarian media company, without providing further details.
MFE and ProSiebenSat.1 declined to comment.
Shares in ProSieben rose 5% in early trade on Wednesday, while MFE shares opened up 0.3% in Milan.
MFE’s stake stands just below the 30% threshold which, under German law, triggers a mandatory buyout offer if surpassed. At present, a voluntary offer to secure more of ProSieben is also a possibility.
It will be up the board to decide if, and how, to proceed with a bid, one of the people said.
Any bid would be launched before ProSieben’s annual general meeting on May 28, two of the people said.
MFE has secured a 3.4 billion euro financing package to support a potential takeover of ProSieben.
Some of the money is needed to refinance up to 2.1 billion euros in gross debt ProSieben may need to repay should MFE cross a 50% voting stake, sources have previously said, citing a “change of control” clause in ProSieben’s debt contracts.
ProSieben is worth around 1.5 billion euros at Tuesday’s closing price. Its value has nearly halved since MFE first invested in the company in 2019.
This month it kicked off sales of its digital assets, a move which would make it easier for MFE to launch an offer by streamlining the business.
(Reporting by Elvira Pollina and Andrea Mandala in Milan, and Amy-Jo Crawley in London. Editing by Valentina Za and Jane Merriman)
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