Springer agrees to offload Pro7

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Axel Springer, the Berlin-based newspaper publisher, has offered to sell one of ProSiebenSat1’s four television channels to secure approval from the federal cartel office for its planned take-over of Germany’s second largest commercial broadcaster.

Springer said on Wednesday that the fate of the proposed €4.2bn deal still hung in the balance after the monopolies watchdog demanded the completion of the sale of the station, Pro7, before Springer takes control of the rest of the company.

Springer, which also publishes the mass-circulation tabloid, Bild, said it was checking whether “the proposed parameters can be met in legal and financial terms”, though it did not set a time for this review.

Although the cartel office’s conditions might prove difficult for the financing of the takeover, they would free Springer from concessions it offered earlier, such as selling a printing business and some of its profitable television listings magazines.

Springer and its bankers have worked frantically in the past few days to secure a potential buyer for the popular Pro7 channel after it became clear federal and state watchdogs would otherwise veto the takeover.

Having initially ruled out a sale of any part of ProSieben, Springer recently began to trawl for potential bidders. While people familiar with the deal said Luxembourg’s SBS might be a partner, others said another foreign company was also involved.

A committee of German state regulators on Tuesday turned down the deal, arguing the mix of a tabloid and TV would give Springer too great an influence over public opinion.

The federal cartel office feared the effects on the advertising market. But the Bonn-based agency on Wednesday said splitting off Pro7 from its sister channels would spur competition in an advertising market currently dominated by ProSieben and RTL, owned by Bertelsmann.

A pivotal role in Springer’s ambition to rival German media giant Bertelsmann again falls to Haim Saban, the US investor who bought ProSieben in 2002 and now wants to sell out to the German newspaper company.

Should Mr Saban and the group of private equity investors he leads be unwilling to give Springer the time to rework its takeover plans, he could seek a new buyer for the broadcaster – very likely to be a foreign group.

Bertelsmann has repeatedly ruled itself out as a potential alternative, as it would face a regulatory veto because it owns RTL, Germany’s biggest privately held TV company.

Regardless of the outcome of the Springer case, the entry of a foreign media company into Germany also seems inevitable. People close to Springer said talks with competitors were continuing, although it was always vital to assess the impact of any deal on the financing of the original takeover plans.

Should Springer meet the conditions set by the federal cartel office, it could have Tuesday’s veto by the states’ media committee revoked through the intervention of three quarters of the state governments represented.

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