March 27, 2020 / 11:14 AM / 2 months ago

ProSieben shares rally after CEO Conze's departure

MUNICH/BERLIN (Reuters) - Shares in ProSiebenSat.1 Media (PSMGn.DE) rallied by 9% on Friday after the abrupt departure of Chief Executive Officer Max Conze ended a drama-filled tenure that unraveled after his deputy denounced a “soap opera” at the German broadcaster.

FILE PHOTO: German media company ProSiebenSat.1 Media SE Chief Executive Max Conze speaks to reporters during a briefing in Berlin, Germany, October 25, 2019. REUTERS/Annegret Hilse/File Photo

ProSieben announced in a late-night statement that Conze, 50, was leaving with immediate effect and Chief Financial Officer Rainer Beaujean - who joined last July from a packaging company - would also assume his responsibilities.

In a statement issued after a supervisory board meeting on Thursday evening, Beaujean said ProSieben “will now return to focusing more strongly on our core segment of entertainment and on sustainably profitable business”.

Conze had sought to accelerate a pivot to digital commerce and advertising to offset a relentless decline in ProSieben’s core commercial TV franchise, but while this preserved top-line growth it squeezed profitability and pushed up debt.

The recent announcement of the $500 million takeover of New York dating app developer Meet Inc (MEET.O) incurred the disapproval of Italian broadcaster Mediaset (MS.MI), which took advantage of a precipitous decline in ProSieben’s share price to up its stake to 20%.

Sources familiar with the matter say that Mediaset, controlled by the family of former Italian Prime Minister Silvio Berlusconi, wanted ProSieben to change course and concentrate on its core media business.

The Italian company has exerted steady pressure on ProSieben, resisted by Conze, to join a European media holding it is setting up to fight back against U.S. streaming giants led by Netflix (NFLX.O). Mediaset declined comment on Friday.

TAKEOVER PLAY?

Analysts at Citi said it was possible that Mediaset could partner with Czech investor Daniel Kretinsky, who owns a 10% stake in ProSieben, to make a takeover bid.

Conze’s grip on the business had visibly loosened of late, with hand-picked allies he brought in from Dyson, the UK vacuum cleaner maker he headed before joining ProSieben in mid-2018, exiting the business.

Deputy CEO Conrad Albert dealt a decisive blow to Conze’s prospects by criticizing ProSieben’s “boardroom soap opera” in a newspaper interview. The company took no action for days before saying Albert would leave by mutual consent.

On a personal level, Conze is nursing losses after backing his own turnaround plan by investing 2 million euros ($2.20 million) of his own money in ProSieben stock.

ProSieben’s e-commerce bets bundled into its NuCom division - which include dating, sex toys and price comparison sites - will be sold off in due course, the company said.

Investor General Atlantic is a minority partner in NuCom.

Additional reporting by Elvira Pollina, Klaus Lauer and Bhargav Acharya; Editing by Michelle Martin and Keith Weir

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