Saban readies another run at ProSiebenSat. 1

Billionaire hammering out new offer for b'casting group

This article was updated at 7:00 p.m. PT on July 21, 2003.

BERLIN — U.S. billionaire Haim Saban appears set to resume his bid for Germany’s multi-channel broadcasting group ProSiebenSat. 1 despite pulling out of a deal to acquire the group last month.

Saban could face competition from equity investors, who are said to be readying a new round of offers for the broadcaster, one of the remaining core assets of the bankrupt TV giant Kirch Media, following a restructuring of the vast Kirch film library.

Kirch Media could not be reached for comment but a source at a Kirch creditor bank dismissed the reports as “speculation, if not self-engineered rumors.”

Saban, who is reportedly backed by Providence Equity Partners, Hellman & Friedman, Thomas H. Lee, Quadrangle Group and Bain Capital, is said to be hammering out a new proposal to be presented in Munich as early as this week. A spokeswoman for Saban declined to comment on the reports.

Kirch Media went belly up last year in the biggest corporate collapse in Germany’s post-war history. Saban was seeking to take over both ProSiebenSat.1 as well as the film library, which had until now been a separate asset. While Kirch creditors had initially insisted on a combined acquisition of both, recent restructuring of the library has left ProSiebenSat.1 as a single asset.

The dissolution of the library has vastly simplified a takeover of ProSiebenSat.1 for other potential investors, many of whom were initially put off by the difficulties in evaluating the enormous catalog. The library had been priced at about $1.4 billion, while the broadcasting group itself was going for $625 million. A purchase of ProSiebenSat.1 would now simply entail a single offer for a majority share in the broadcasting group..

According to some reports, investors Hellmann & Friedmann, Thomas H. Lee and Permira, which last year bought Kirch pay-TV platform Premiere, are also weighing offers for the broadcaster independent of Saban. Italy’s Mediaset and French TV group TF1 have also been named as a potential bidders for the broadcaster, while AOL Time Warner is said to be looking at part of the library.

Following an impasse in negotiations last month with Saban, who failed to meet deadlines for the acquisition, Kirch creditors developed an alternative plan for ProSiebenSat.1 that includes a 10-year programming deal for 2,000 top movies and TV series representing 90% of the 18,000-title Kirch library’s total value. The rest of the programming stockpile is to be put on the market.

For the time being, ProSiebenSat.1 remains under the control of its management, headed by chief exec Urs Rohner, and Kirch Media, which is in the hands of creditors.

Kirch Media and German publisher and ProSiebenSat.1 shareholder Axel Springer Verlag, meanwhile, are going through with a deal agreed to in March which gives Springer a bigger stake in the broadcaster as well as a $68 million payout. In return, Springer has agreed to give up a first-buy option it held for a remaining 16.5% stake in ProSiebenSat.1.

Move guarantees that Springer’s overall share will not drop below 10% following ProSiebenSat.1’s planned capital increase. ProSiebenSat.1 is set to get a $340 million infusion from the increase and from direct

investment from Kirch creditor banks.

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