Reuters – ProSieben Owners Prepare Exit After Nordic Sale

Private equity firms KKR & Co. and Permira positioned themselves for a hefty dividend from ProSiebenSat.1 and an exit from the German media group they control after it agreed to sell one of its best-performing units. ProSiebenSat.1, Europe’s second-biggest media group after RTL, detailed plans on Friday to sell its Nordic operations to Discovery Communications for about $1.7 billion.

(Reuters) – Private equity firms KKR & Co and Permira positioned themselves for a hefty dividend from ProSiebenSat.1 and an exit from the German media group they control after it agreed to sell one of its best-performing units.

ProSiebenSat.1, Europe’s second-biggest media group after RTL, detailed plans on Friday to sell its Nordic operations to Discovery Communications for about $1.7 billion.

The restructuring move paves the way for a KKR and Permira disposal after ProSieben converts its non-voting preference shares into voting common shares to attract a broader investor base for the Frankfurt-listed firm.

“It means the private equity owners are able to place up to their full 53 percent stake on the market at some point,” said Goldman Sachs analyst Richard Jones.

The Nordic deal sweetens the exit for the private equity investors while Discovery, with this acquisition and others, prepares to expand its footprint in Europe.

KKR and Permira together own 88 percent of ProSieben’s voting shares. Dutch publisher Telegraaf Media Group owns the rest.

The German media group said it wants to propose a dividend payment of about 5.60 euros per share after completion of the sale, which is expected in the first quarter.

In 2012, the company paid a dividend of 1.17 euros per preference share and 1.15 euros per common share.

ProSieben called off an attempt to sell the division last year as offers were too low. Sources have told Reuters that Discovery also was one of the bidders at the time.

In August this year, the German media company said it was looking again at selling after receiving expressions of interest.

Discovery, whose cable networks include Discovery Channel, TLC and Animal Planet, also on Friday said it would take 20 percent equity stakes in French television group TF1’s Eurosport Group and four pay-TV channels in France.

The U.S. company also said its board had approved a $1 billion increase to its existing stock buyback program.

The Eurosport deal, worth about $221.6 million, gives Discovery the option to raise its stake to 51 percent in two years.

Citigroup acted as financial adviser to Discovery.

ProSiebenSat.1 shares were up 2.3 percent by 1525 GMT at the top of the sector index which was down 0.2 percent.