Telegraaf forced into Pro7Sat.1 stake

German television group ProSiebenSat.1 has a new major shareholder. Dutch publisher Telegraaf Media Groep (TMG) has bought from main shareholders KKR and Permira a 12% interest in the ordinary shares with voting rights for €377 million. However, the engagement is not entirely voluntary and will result in a considerable writedown.
TMG says it was forced to conclude the deal after the two financial investors exercised a right to dispose of the share package in ProSiebenSat.1. TMG sold its 20% stake in SBS Broadcasting last year when ProSiebenSat.1 took over the European television group and in return agreed to the put option to acquire shares in the merged company which KKR and Permira have now exercised. As part of the agreement pertaining to the SBS takeover, the Dutch publisher already has two seats on ProSiebenSat.1’s supervisory board.

The deal is a bad one for TMG as it has to pay KKR and Permira €28.71 per share – well above the current stock market value of €5.42 as of Friday, August 1. According to TMG, the transaction is likely to result in a writedown of between €150 million and €200 million.

Despite this, TMG considers the engagement to be a sensible strategic move. “TMG has every confidence in the long term growth and synergy potential of the newly formed ProSiebenSat.1 and SBS combination. We therefore view our participation in ProSiebenSat.1 as an important step that fits into our strategy of becoming less dependent on print media,” said Ad Swartjes, CEO of TMG in Amsterdam.