Kirch Gruppe-controlled ProSiebenSat.1, Germany's largest free-to-air TV broadcaster, is being eyed hungrily by at least two unnamed Hollywood movie studios.
Despite its cash-haemorrhaging tendency, ProSeiben is the jewel in the Kirch crown – thanks to its core rights and broadcasting assets. Shrewdness is not a scarce commodity in Tinseltown and the studios realise that debt-beset Kirch could be forced to sell sooner rather than later.
Bankers retained by the studios are said to be examining ways in which they might snatch control of Kirch's 52.5% holding in publicly listed ProSieben.
One scenario is a €1.6bn ($1.4bn; £98.6m) bid for the Kirch stake, valuing the company at about €3bn. This would activate a mandatory offer for the 36% of the equity held by public shareholders, as well as the 11.5% held by publisher Axel Springer. If successful, the stratagem would result in ProSeiben being taken off the market.
In an alternative screenplay, the studios simply sit tight and wait for Kirch to go under, then buy the stake from its creditors. But this option could be torpedoed by government intervention: “If the studios think Kirch is headed for bankruptcy, they would wait and see,” said one of the bankers concerned. “But if there is a political rescue deal, they must be prepared to move quickly."
All studios contacted on Thursday were uncharacteristically zip-lipped, although Paramount’s parent Viacom and AOL Time Warner, owner of Warner Brothers, are known to have been running the sliderule over ProSieben of late.
Data sourced from: Financial Times; additional content by WARC staff