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Mediaset takes ProSiebenSat.1 stake up to concentration threshold

Mediaset has purchased an additional 4.1% of Germany’s ProSiebenSat.1 in a move that takes the Italian media group to within a hair’s breadth of the threshold that would trigger a concentration probe.

The acquisition of share by Mediaset Italia gives Mediaset Group as a whole control of up to 24.9% of the voting rights in ProSiebenSat.1, just shy of the 25% threshold that meets the local regulatory regime’s definition of market concentration.

The move comes after Mediaset sought the approval of German competition regulator the Bundeskartellamt for further acquisitions of shares earlier this month after admitting it intended to take a “significant competitive interest” in ProSiebenSat.1, under German competition rules.

Under Germany’s rules, the acquisition by one or several enterprises of a material competitive influence over another company can constitute a concentration under certain circumstances if the stake held is under 25%. In this case the Bundeskartellamt raised no objection.

Mediaset has been steadily building its position in ProSiebenSat.1 since last year as the struggling German broadcaster’s stock price has fallen.

Mediaset España, Mediaset’s Spanish unit with which it plans to merge under the currently stalled MediaForEurope project, acquired a 4.25% stake in the German broadcaster’s share capital in February, equivalent to 4.38% of voting rights excluding treasury shares. The move took the Spanish unit’s stake in ProSiebenSat.1 to 9.75% after it acquired a 5.5% stake in ProSiebenSat.1 in November last year.

Mediaset Italia separately owned a further 9.6% share in the German broadcaster at that time, giving the group as a whole a 20.1% of voting rights, excluding treasury shares, before the latest acquisition.

Mediaset’s move will fuel further speculation about a possible takeover bid, particularly after ProSiebenSat.1 this week became the latest media company to pull its financial guidance under pressure from the coronavirus crisis.

ProSiebenSat.1 said it expected trading to be heavily impacted in the second quarter, with ad revenues falling by 40% year-on-year in April. The media outfit said it could not provide an outlook for the second quarter or the rest of the year until the full impact of the crisis becomes clearer.

Group revenues for the first quarter were more or less flat year-on-year, growing by only 1% to reach €913, even before the full impact of the coronavirus was felt.

EBITDA was down to €157 million from €190 million, while net income fell from €94 million to €58 million.

ProSiebenSat.1’s recently-departed CEO Max Conze had consistently played down or dismissed the idea of a merger between the pair, but the company’s shift in strategy since Conze’s departure, with a renewed focus on its core business, could potentially foreshadow a change in attitude.