Berlusconis’ German TV raid is worth resisting

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German 1.7-billion-euro broadcaster ProSiebenSat. 1 Media XETR:PSM has found itself at the centre of an unlikely M&A drama. Its two largest shareholders, Italy’s MFE-MediaForEurope MIL:MFEA and Czech investment group PPF, seem to be jostling for control of the company – but so far without launching conventional takeover bids that stand a chance of persuading all minority shareholders to sell. It's starting to reflect a broader debate about the right way to modernise Europe's struggling linear TV sector.MFE, the vehicle of Italy's ​Berlusconi family, made a lowball cash and shares offer for the German broadcaster in March. It now owns just over 30% of the company. ProSieben shares have largely traded above the live value of that bid in recent weeks, according to Breakingviews calculations, suggesting that few investors will tender. That may be the point, from the Berlusconis' perspective, since it's more economical to control a company with a large minority stake rather than owning the whole thing and having to consolidate the debt. PPF, with other European media assets and a 15% holding in ProSieben, is taking a different approach. On Monday it offered 7 euros per share in cash but said it would only end up with a maximum 29.99% stake in the German group, which broadcasts shows including the Teutonic version of "The Masked Singer". That price was 17% higher than ProSieben's Friday closing price and 21% above MFE's live bid value, PPF said, but it's not available to all shareholders by virtue of the bidder's self-imposed ownership cap. The Italian side is now considering raising its offer in response, Reuters reported on Wednesday citing a source close to the matter. Unless either suitor changes tack and makes a knockout bid for the whole company, the stakes are nuanced for other shareholders. It may end up being a question of which pushy investors' favoured strategy carries the day. The Berlusconis seem likely to ​want closer collaboration with MFE's Italian and Spanish TV properties. A person familiar with PPF's plans, meanwhile, told Breakingviews that it would pursue greater investment in local content and support a digital overhaul, with a focus on modernising the company's streaming offering. The Czech recipe, so far, looks better - not least because there is minimal evidence that MFE's cross-border plan would yield much in the way of cost savings or...

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