ProSiebenSat.1 ‘may be more tempted’ by MFE plan as it downgrades guidance

ProSiebenSat.1 could be tempted to look again at MediaForEurope’s proposals for the creation of a pan-European broadcast group after downgrading its guidance for the full year on weaker-than-expected advertising revenue, according to analysts from Berenberg.

According to the analysts, ProSiebenSat.1’s appointment of a new CEO, Bert Habets, who will replace former CEO Rainer Beaujean as of tomorrow, could also lead to a change of heart. Beaujean was strongly opposed to a merger and highly sceptical of the value of cross-border ownership.

Berenberg speculated that “with a new CEO, and weakened profitability, the prospect of synergies in advertising and streaming technology may be more tempting”.

Noting that MediaForEurope had “no interest in ProSiebenSat.1’s non-broadcasting assets”, the analysts set a new price of target of €6.50 for the German broadcaster’s stock.

Berenberg said the group’s decline in Q4 advertising of 17% was “greater than we had anticipated” but that it had viewed general expectations as too high against a backdrop of declining viewing figures and a weakening economy.

Berenberg predicts a 5% underlying decline in German market advertising revenue for its full-year 2023 numbers.

In its recent financial update, ProSiebenSat.1 said that the current quarter “shows signs of a more pronounced weakened macroeconomic environment than initially reflected in the latest full-year outlook” and said it now expected revenues of about €4.15 billion for the full year, with adjusted EBITDA of around €650 million.