At the Annual General Meeting in April a year ago, one could have got the impression that the two shareholders were making common cause – the Italian media group Media for Europe (MFE) and the Czech investment company PPF. At the time, both prevailed with their counter-proposals for the elections to the Supervisory Board.

In the meantime, however, varying ideas about ProSiebenSat.1's strategy can be clearly recognised. PPF is planning a different programme to MFE, which is another reason why the two are competing for shareholders' favour with takeover bids. On the one hand, the differences are quite obvious with regard to the sale of the German media and internet group's non-core investments. On the other hand, MFE and PPF have different approaches to the question of whether a European media group would be a promising strategy to compete in the long term with US giants such as Disney, Apple, Netflix and Amazon.

Everyone agrees that ProSiebenSat.1 should focus on entertainment as its core business: Executive Board, Supervisory Board, MFE and PPF. However, MFE takes a different view on the timetable. The Italians are pushing for a rapid sale of investments. „Concrete and definitive decisions are needed,“ MFE CEO Pier Silvio Berlusconi demanded back in January 2024. The management of PPF has since changed its mind. Selling yes, but selling quickly is the wrong approach, says Didier Stoessel, Head of Investment at PPF.

He agrees with the ProSiebenSat.1 Executive Board that the price must be right. Time pressure would only strengthen the negotiating position of prospective buyers. Group CEO Bert Habets and CFO Martin Mildner have apparently pleased PPF: By announcing the sale of Verivox for a decent price two months ago, they have proven that they can deliver. The new owner of the internet consumer portal is Molitply in Italy.

The online perfumery Flaconi is still on the sale list. In 2021, the former Management Board unsuccessfully tried to float Flaconi on the stock exchange, or sell it. Shareholders may find out more at the AGM this week. The IPO of dating agency Parship-Meet-Group had been targeted for 2022, but has been put on ice for an indefinite period. This business is no longer doing so well.

The second point where the differences in the ideas of the two major shareholders become apparent, and which weighs more heavily, is MFE's European strategy. The management around Pier Silvio Berlusconi, the son of the politician and entrepreneur Silvio Berlusconi who died two years ago, is convinced that only by joining forces in Europe will it be possible to create a counterweight to Amazon, Netflix and the like – including a shared streaming platform. After the TV stations in Italy and Spain, the three German-speaking countries are to be added with the TV stations of ProSiebenSat.1. But Berlusconi's concept is rather vague.

Moreover, no other European media group is pursuing such an idea. PPF is not convinced either. ProSiebenSat.1's experience with the SBS Group, which belonged to the group from 2007 to 2012, was disappointing: No synergies worth mentioning could be achieved. SBS included stations in the Netherlands, Belgium, Scandinavia and Eastern Europe.

PPF, on the other hand, has high hopes of bringing high-quality content to digital platforms and thus converting linear television into a digital medium more quickly than before. PPF is already driving this forward in some countries and language regions. „Joyn“ from ProSiebenSat.1 is a good streaming platform, according to people close to PPF. But it needs more content. And the group needs to focus more on digital content than before and also dare to be more „digital first“, that is, to show particularly attractive content first or exclusively on Joyn from time to time.

Central European Media Enterprises (CME), the media holding company of PPF, is present in seven Central and Eastern European countries from the Czech Republic to Romania and Moldova, with 46 TV channels. The target audience there totals 49 million people – fewer than in ProSiebenSat.1's German market alone. In addition to the channels, CME operates the streaming platform Voyo, which is called One Play in the Czech Republic. PPF describes the digital platform as a key element of CME's strategy.

As a shareholder of ProSiebenSat.1, PPF is therefore not only in the role of an investor with a self-proclaimed long-term interest, but also contributes knowledge and experience from the industry. With the takeover bid from MFE, PPF saw a greater influence on the strategy of the German company at risk. The Czechs therefore followed suit last week and offered shareholders 7 euros per share – more than MFE – to increase their stake to a maximum of 29.99%. According to the latest mandatory notification, PPF increased its voting rights from 14.91% to 15.01% on 15 May. Including derivatives, its stake now stands at 15.44%.

PPF wants to be as strong a shareholder as MFE, according to sources close to the investment company. This would allow the ProSiebenSat.1 Executive Board to better concentrate on its main tasks: expanding the digital offering and strengthening the core business with local content.

PPF's counter-offer thwarts MFE's plan. The Italians make no secret of this in the offer document: They do not intend and do not expect ProSiebenSat.1's free float to be significantly reduced. The price offered is slightly above the statutory minimum – a so-called lowball offer. MFE wants to pay 4.48 euros in cash and 0.4 MFE shares per share – currently around 5.80 euros.

The package is unattractive for shareholders, which is entirely in MFE's favour. Nevertheless, the question arises as to whether the Italians will increase their offer in order to secure their lead over PPF among shareholders. After all, the Supervisory Board is the best place to influence strategy. Its composition reflects the shareholder structure. Since the AGM a year ago, four of the nine seats on the Supervisory Board have been allocated to MFE and two to PPF. With the announcement of the offer, PPF has immediately laid claim to a third position.

MFE sources say that a higher offer from the Italian company is not to be expected. A fierce bidding war is therefore not on the cards. Instead, speculation is doing the rounds: for example, the assumption that PPF is trying to put itself in a good position with its offer in order to get a better price for its share package from MFE later on. The Italians have not ruled out such a purchase. There are doubts about PPF's recently announced strategic interest in ProSiebenSat.1. Initially, the Czechs had presented themselves solely in the role of a financial investor.

It comes as no surprise that the Executive Board and Supervisory Board of ProSiebenSat.1 recommended in a statement published last week that the offer from MFE should not be accepted. „Not appropriate from a financial point of view“ is the assessment in view of the price offered, which is below PPF's offer and the current share price. CFO Martin Mildner had already sharply criticised a possible lowball offer from MFE in an interview with Börsen-Zeitung a year ago, as it denies the other shareholders a takeover premium.

MFE probably expected nothing less than a negative response. Such a vote is also in the interest of the Italian shareholder for another reason: If MFE's stake exceeds 50%, ProSiebenSat.1's creditor banks could cancel their financing agreements due to a customary change-of-control clause. The amount at stake is 2.625 billion euros. This contrasts with credit lines from MFE of only 2.1 billion euros. If few or no ProSiebenSat.1 shareholders accept the offer, this would be entirely in MFE's favour.