RTRS KKR, Permira to buy ProSiebenSat.1 - sources
(Adds comments from Bavarian state premier, Dogan Yayin, analyst; updates shares)
By Jeffrey Goldfarb
LONDON, Dec 14 (Reuters) - Private equity firms Kohlberg Kravis Roberts & Co. and Permira have agreed to buy ProSiebenSat.1 <PSMG_p.DE> in a deal that values the German broadcaster at about 5.7 billion euros ($7.5 billion), people familiar with the matter said on Thursday.
KKR and Permira will pay about 29 euros a share to buy a 50.5 percent controlling stake from a group of firms led by U.S. media mogul Haim Saban, one of the sources said.
The two private equity firms plan to merge ProSiebenSat.1 with SBS Broadcasting, which they bought last year, to create a Germany-based, pan-European rival to RTL Group <AUDK.LU>, which is owned by German media conglomerate Bertelsmann AG [BERT.UL], the source said.
"Long-term, it looks very positive because of the synergies. It's a good fit between SBS and ProSieben," said an analyst who asked not to be named, adding that the companies would now be able to jointly buy and develop programmes and have a common European strategy.
ProSiebenSat.1 Chief Executive Guillaume de Posch and other top executives are expected to stay on after the deal closes, the source said.
ProSiebenSat.1 and Permira could not immediately be reached, while KKR denied comment.
For Saban and his partners, the deal price would be nearly quadruple the 7.50 euros a share they paid in August 2003 for ProSiebenSat.1, which they salvaged from the ruins of the collapsed media empire of Leo Kirch.
The company's five channels now boast 30 percent of Germany's TV audience and 45 percent of its TV advertising market.
Public shareholders are likely to be offered a three-month moving average for their shares by KKR and Permira, or about 22.50 euros a share.
At 1548 GMT, shares in ProSiebenSat.1 were down 2.5 percent at 23.10 euros.
"Short-term it won't help the free-float shareholders. They'll get a relatively low price," the analyst said.
TURKISH RIVAL
The source said a bid from rival suitor, Turkish media company Dogan Yayin <DYHOL.IS>, was rejected because of political opposition in Germany.
Shares of Dogan Yayin, which had disclosed it had offered to buy ProSiebenSat.1, jumped 5 percent to 5.00 lira following reports that it was not the winning bidder.
A spokesman for Dogan said its bid had been no higher than that of KKR and Permira, without elaborating.
Another private equity team comprising Apax Partners [APAX.UL] and Goldman Sachs <GS.N> was a third bidder.
The deal with KKR and Permira is not expected to face any regulatory hurdles, the source said, and should close in the first quarter of 2007.
The state premier of Bavaria, in whose capital Munich the new company will be based, welcomed the deal. "The bidder group Permira/KKR has put forward ... a concept that will strengthen Munich as a media centre," Edmund Stoiber said in a statement.
A person close to the deal, who asked not to be named, said the company's recovery had put to rest fears that private equity investors -- sometimes disparagingly referred to as "locusts" in Germany -- were only interested in short-term gain.
"In terms of the whole locust debate in Germany, Saban and his partners are handing over a healthier company than when it was taken over, with jobs more secure than ever.
"The combined ProSieben-SBS will have headquarters in Munich, so you will have a German company that will be a European champion," the source said.
ABORTED SPRINGER BID
An attempt by Saban and his partners -- collectively known as German Media Partners -- to sell ProSiebenSat.1 to German newspaper publisher Axel Springer <SPRGn.DE> for 23.37 euros a share was rejected by the country's competition authorities earlier this year.
Axel Springer, which owns 12 percent in ProSiebenSat.1, bought a 25 percent stake in Dogan's broadcasting division last month just as bids were being submitted for ProSiebenSat.1.
ProSiebenSat.1's EBITDA has more than tripled under Saban's ownership.
Saban's partners are Thomas H. Lee Partners, Bain Capital, Hellman & Friedman, Providence Equity Partners, Quadrangle Group, Putnam Investments and Alpine Equity Partners.
Together they own 88 percent of the voting shares. The public free float has no voting control.
(Additional reporting by Mathieu Robbins in London and Georgina Prodhan in Frankfurt)
((Reporting by Jeffrey Goldfarb; editing by Jane Baird; Reuters Messaging: , tel: +, email: ))
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