KKR returns to invest in ‘undervalued’ ProSiebenSat.1

US private equity company KKR has opted to reinvest in ProSiebenSat.1, stating that the Germany-based commercial broadcasting group is undervalued at present.

KKR has acquired a stake of 5.2 per cent, 3.2 per cent directly and two per cent via unspecified instruments. KKR’s return comes after it and fellow private equity firm Permira bought ProSiebenSat.1 in 2006, only to sell up eight years later.

KKR told Reuters: “We have decided to reinvest into ProSiebenSat.1 based on our belief that markets are currently undervaluing the company. We view this as a financial investment.”

ProSiebenSat.1 now has three investors with a sizeable shareholding in the company. Mediaset, the Italy-based commercial broadcaster, last month furthered its efforts to create a pan-European media group by raising its stake in ProSiebenSat.1.

Mediaset secured an additional stake of up to 4.1 per cent of the share capital of ProSiebenSat.1, meaning it now has up to 24.9 per cent of the voting shares of the company. The additional stake means its interest in ProSiebenSat.1 has risen from 20.1 per cent to 24.2 per cent.

Earlier in April, Germany’s Federal Cartel Office, the Bundeskartellamt, approved Mediaset’s request to raise its stake in ProSiebenSat.1 up to 25 per cent, a threshold enabling it to vote at the latter’s annual general meeting scheduled for June 10.

Mediaset has been increasing its stake in ProSiebenSat.1 to further its wider European growth strategy. Mediaset is seeking to build a pan-European portfolio with access to major markets. In June 2019, Mediaset announced the creation of MediaForEurope (MFE), owning stakes in leading European media groups. The MFE vision incorporates a merger of Mediaset’s Italian and Spanish business into a Dutch holding company.

Investor Daniel Kretinsky’s Czech Media Invest (CMI) vehicle also holds a 10-per-cent per cent stake in ProSiebenSat.1.

The ProSiebenSat.1 suite of channels include the flagship Sat.1 channel in Germany, along with ProSieben, ProSieben Maxx and Kabel Eins. In Austria, the group also owns and operates Puls 4, which holds Uefa Europa League rights (from 2018-19 to 2020-21). Sports broadcast rights held by ProSiebenSat.1 include American football’s NFL, ESL esports events and WWE wrestling.

In March, ProSiebenSat.1 announced the departure of chief executive Max Conze with immediate effect, while chief financial officer Rainer Beaujean assumed the role of chairman of the executive board.

Conze’s departure came amid reports that he was not supportive of ProSiebenSat.1’s increasingly close relationship with Mediaset. At the end of last year, Conze publicly expressed his scepticism about a merger of Mediaset and ProSiebenSat.1.