BERLIN — Billionaire producer Haim Saban is asking Germany’s Federal Financial Supervisory Authority (BaFin) to exempt him from a mandatory tender for outstanding shares in Teutonic TV group ProSiebenSat.1, a move that could save him as much as $500 million.
Saban, who is in the process of taking control of Germany’s largest broadcasting group from bankrupt parent Kirch Media, has also presented a binding offer for Kirch Media’s sports channel DSF.
In accordance with German law, investors must make an offer to minority shareholders if they acquire 30% or more of a company’s voting rights. Saban, who is looking to get 72% of ProSiebenSat.1’s vital voting rights, could be exempted from the rule if the company were in serious financial crisis.
BaFin spokeswoman Sabine Reimer said Tuesday that the org was examining an application for exemption filed on behalf of Saban but added that additional information was still needed from Saban before the review could be completed.
Saban is reportedly arguing that the group is indeed a restructuring case in view of expected first quarter losses this year and a 15% drop in sales. ProSiebenSat.1 has been reeling from the ongoing advertising slump, which has been compounded by the dire state of the German economy. The group saw an 80% drop in full-year profits last year to $16 million.
A company does not have to be insolvent nor loss making for the investor to get an exemption from the BaFin, Reimer said. A risk that credit lines could be cancelled could be enough to warrant such a move, she added.
A spokeswoman for Saban declined to confirm the move but said the situation was being evaluated and added that Saban was prepared to comply with the necessary legal requirements of the takeover.
Saban is set to pay nearly $600 million for a 36% stake (which includes 72% of the voting rights) in the broadcasting group. An offer to minority shareholders would have to be based on the three-month average price for ProSiebenSat1 leading up to the takeover bid — about $6.96 per share.
There are currently 70 million shares in free float. Company’s current stock price has remained stable at $7.10. Saban is likely to make the case that the $500 million would be better spent on ProSiebenSat.1 and on setting the group on a course towards greater profitability than on buying out minority shareholders.
Meanwhile, Saban reps are also refusing to comment on reports that the TV tycoon has placed a bid on Kirch Media’s sports channel DSF. Saban’s offer for the web is said to be higher than the one put forward by a consortium led by German retail giant KarstadtQuelle. Saban and KarstadtQuelle’s bids for DSF are reportedly between $15 and $20 million.