November 15, 2019 / 11:00 AM / 23 days ago

Mediaset could raise ProSieben stake to 20%, doesn't plan tender offer

BARCELONA, Nov 15 (Reuters) - Mediaset could raise its stake in German broadcaster ProSiebenSat.1 to 20% but does not plan to launch a tender offer, Chief Financial Marco Giordani said on Friday, describing the investment as a defensive one.

Giordani repeated his call for ProSieben to join Dutch holding company Media For Europe, which the Italian group is creating as a vehicle for the European TV industry to achieve scale together and fend off U.S. streaming giants like Netflix .

"Clearly for us it's not a final step. We would hope to see others joining the project," Giordani told the Morgan Stanley European Technology, Media and Telecoms Conference in Barcelona on Friday.

"We are sure that that's the best way for the shareholders to get the value of the larger scale."

ProSieben CEO Max Conze has rebuffed Mediaset's overtures, preferring to focus on his own pivot to digital and cooperating with other European players in particular growth areas, seeing scant synergies in full-blown consolidation.

Controlled by the family of former Italian Prime Minister Silvio Berlusconi, Mediaset now holds 15.1% of ProSieben after it bought a 5.5% stake on Monday through its Spanish unit Mediaset Espana.

"As far as ProSieben is concerned, we are the largest shareholder with 15%, and if Max is able to deliver his plan in time we are happy because we will benefit from the share price increase," said Giordani. "If you like, we are self-protected."

He added that Mediaset was free to raise its investment in ProSieben to 20%. "Having said that, there are no intentions to launch a tender offer. It is more a defensive move than an offensive move," he said.

Giordani described existing collaboration via the European Media Forum, a loose industry group, as ineffective and said the Dutch holding company into which Mediaset is folding its Italian and Spanish vehicles was a more effective setting.

"The market around us is not waiting for full democracy," he said. "We prefer not to be perfect but to have full alignment of interests and execution."

He said the establishment of Media For Europe, which has faced a legal challenge in Italy, should be completed in the first quarter of 2020.

No direct talks were planned with ProSieben's Conze, said Giordani, but Mediaset's project would only make sense if it included Germany - Europe's largest media market.

"He doesn't agree on the methodology. Okay. We understand him. I mean, we understand what he stands for," Giordani told reporters on the sidelines of the Morgan Stanley event.

"We are only worried about time, because the world around us is not really waiting. If he's right, we are 15% shareholders, and the share price will go up and we will be happy." (Reporting by Douglas Busvine; Editing by Mark Potter)

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