March 11, 2020 / 12:31 PM / 22 days ago

UPDATE 2-Mediaset considers ProSieben stake options, urges consolidation

* Mediaset could sell, keep or increase 15% stake - Giordani

* Italian company urges European TV industry consolidation

* ProSieben's $500 mln dating deal sends shares to decade low

* German company's deputy CEO slams "boardroom soap opera" (Adds Mediaset CFO comments on strategy, outlook)

By Elvira Pollina and Klaus Lauer

MILAN/BERLIN, March 11 (Reuters) - Italian media group Mediaset is considering options for its 15% stake in ProSiebenSat.1 Media, CFO Marco Giordani said on Wednesday, adding the need for the European TV industry to consolidate was now greater than ever.

Giordani's intervention comes amid a deepening crisis at Germany's ProSieben, where CEO Max Conze's announcement last week of a $500 million deal to buy a U.S. dating app developer sent its shares to their lowest in a decade.

He spoke after Mediaset reported a jump in 2019 operating profit on the back of cost cuts but declined to give an outlook due to the coronavirus epidemic that has forced the Italian government to impose a national lockdown.

Mediaset, controlled by former Prime Minister Silvio Berlusconi's holding company Fininvest, built the stake last year to push its broader agenda of uniting broadcasters under a European holding company it is setting up.

Mediaset had structured its investment so that it could exit if it wanted to, Giordani told analysts on a conference call. The investment uses a 'collar' option strategy that protects against share-price declines.

Mediaset was awaiting a ProSieben strategy update next month and would decide, based on it, whether "to stay, to leave or to increase" its investment, he added.

"From the financial point of view we have structured the acquisition in a way that theoretically we can also leave the investment if for any reason we decide that the consolidation would not be possible," he said.

Giordani reiteraited Mediaset's commitment to merging its Italian and Spanish businesses into a Dutch holding company, called MediaforEurope, that it wants to use to build alliances.

Vivendi, Mediaset's second-largest shareholder, is fighting the project in court, saying the governance structure of the new entity would tighten Berlusconi's grip.

ProSieben's Conze has, for his part, pushed back against the idea of a merger while welcoming Mediaset's investment as a vote of confidence in his strategy and pushing to deepen cooperation in areas such as video streaming.

Since Mediaset first disclosed its stake, ProSieben shares have declined by 40%, as U.S. streaming giants like Netflix grab the attention of younger viewers. The Munich-based company is now valued at $2.4 billion.

Mediaset shares fell 0.7% while ProSieben shed earlier gains to trade flat.

"SOAP OPERA"

Separately, ProSieben Deputy CEO Conrad Albert criticised his own company in a newspaper interview, saying that it was an "outstanding" business but that it had created the impression of a "boardroom soap opera".

Albert told the Sueddeutsche Zeitung he would not renew his contract, which ends in April 2021, and that he had already informed the supervisory board in June 2019 that he would not seek an extension.

One source familiar with the matter said that the ProSieben supervisory board was considering the position of Albert, a company veteran, following his comments. Albert, asked to respond, said he was not aware of any plan to terminate his contract.

Conze's strategy of pivoting into digital advertising and commerce to compensate for a decline in advertising revenues from its core TV franchise has been accompanied by a drumbeat of high-level departures in recent months.

The 50-year-old former CEO of UK vacuum cleaner maker Dyson was sidelined over the New Year after he broke his leg on a skiing trip, and last week's takeover of Meet Group - one of its largest deals - was done while bosses were working from home due to the coronavirus. (Writing by Douglas Busvine in Berlin Editing Philippa Fletcher and Keith Weir)

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