ProSieben owners plan for growth

KKR, Permira to make Munich center of new TV empire

BERLIN — Kohlberg Kravis Roberts and Permira have assured political leaders in Bavaria that they have long term plans for ProSiebenSat 1. The equity firms last week won a Euros 3 billion ($4 billion) auction for the broadcaster, which is based in Munich, the capital of the southern German state.

After a meeting between KKR Europe topper Johannes Huth and Permira’s German boss Thomas Krenz with Bavaria state premier Edmund Stoiber, the state government issued a statement saying the investors had vowed they wanted to expand the company and protect jobs in Munich.

The assurances helped dispel any worries about a volatile future for ProSiebenSat 1, on which U.S. media tycoon Haim Saban turned a handsome profit in just over three years of ownership. German political leaders have referred to equity funds in political campaigns as “locusts,” striking a chord with voters worried about jobs being moved abroad.

Stoiber’s chancellery said the investors assured them they are planning to expand the Munich base of the German media gem to make it the center of a new European media group through the merger of ProSiebenSat 1 and SBS broadcasting, with a special focus on Eastern Europe, where SBS is already strong in Romania and Bulgaria.

Last week ProSiebenSat 1 confirmed that Lavena Holding, KKR and Permira’s shareholding joint venture, plans to merge ProSiebenSat 1 and SBS Broadcasting to create a pan-European TV group. The group would be the second biggest broadcaster in Europe behind Bertelsmann’s RTL Group.

ProSiebenSat 1, which controls five free TV webs, including Pro7 and Sat 1, and two pay TV channels, has annual revenue of around $2.64 billion, while SBS, with 19 free TV and 20 pay TV outlets in the Benelux, Scandinavia and Eastern Europe, grosses about $1.32 billion a year.

The deal gives Lavena the 50.5% of ProSiebenSat 1’s share capital held by media tycoon Haim Saban and his investment partners. Stake consists of 88% of the voting shares and 13% of non-voting shares.