Germany's second-biggest commercial TV group, ProSiebenSat.1, appeared to be up for sale again after would-be buyer, publisher Axel Springer, buried its ambition to take over the group in face of regulatory opposition.
ProSiebenSat.1: Ready for new for offers
The prospects of a new takeover battle sent ProSiebenSat.1 shares sharply higher on the stock exchange. Springer, publisher of the mass-circulation daily Bild, had originally signed an agreement with ProSiebenSat.1's owner, US-Israeli billionaire Haim Saban, to acquire the broadcaster for 4.2 billion euros ($5.0 billion) in August. But the merger was blocked both by the media watchdog KEK and the federal cartel office on the grounds that it would give Springer a dominant market position in advertising and too much influence over public opinion.
In face of such fierce resistance, Springer announced on Wednesday that it was throwing in the towel.
"The management board of Axel Springer and P7S1 Holding (the investor group led by Haim Saban's Saban Capital Group) announced today that they have mutually agreed to terminate plans for Axel Springer to acquire ProSiebenSat.1 Media," the newspaper publisher said in a statement.
Saban said he'd look for alternatives to Springer
Saban issued a statement in Munich expressing "disappointment" with the development. He was nevertheless "extremely satisfied" with the TV group's performance and would now examine "alternatives" to the Springer deal, Saban said.
The development means the broadcaster could find another buyer. Media reports have suggested that TF1 of France, NBC Universal and Viacom of the United States could now take a fresh look at the business.
The prospect of a fresh takeover battle sent shares in ProSiebenSat.1 soaring in Frankfurt. The price of shares was showing a gain of 0.70 euros or 3.72 percent at 19.50 euros in mid-morning trade.
Springer drew the line
Initially, Springer had conceded it was ready to sell one of the group's four TV channels -- the popular ProSieben channel -- to try and win regulatory approval for the deal. Alongside ProSieben, ProSiebenSat.1 also owns the Sat.1, Kabel1 and N24 channels. But the federal anti-trust office had insisted that ProSieben be sold before the takeover, a condition Springer was unwilling to fulfill.
Springer decided it wasn't worth pursuing the deal
Springer could have sought special permission from the government to overturn the anti-trust office's ruling. But after "extensive analysis and careful consideration of the possibilities for an appeal and other available options, Axel Springer and P7S1 Holding came to the conclusion that in light of the numerous economic and legal uncertainties, a possible appeal or a possible application for a ministerial permit would have resulted in unacceptable risks for all parties involved," the Springer statement continued.
"As a consequence, neither the share purchase agreement dated August 5, 2005, nor the voluntary public takeover offer made to the shareholders of ProSiebenSat.1 Media will be consummated," it concluded.
ProSiebenSat.1 chairman Guillaume de Posch said the takeover by Springer "would have been a good solution." The broadcaster would now focus on "expanding further under our own strength and concentrate on our operating business," de Posch said. "Our aim is strengthen our core TV business further and to diversify sales."