The executive and supervisory boards of ProSiebenSat.1 have formally endorsed a takeover bid by MFE-MediaForEurope, the pan-European TV group controlled by Pier Silvio Berlusconi, after MFE upped its offer for the German broadcaster.

Describing the revised offer which will see MFE offer ProSieben shareholders a cash payment of 4.48 ($4.90) per share and a swap of 1.3 MFE A-shares per ProSieben share as adequate, the boards called on ProSieben shareholders to support the bid.

The cash offer is unchanged from MFEs original bid, but the share swap component is significantly improved, up from an original offer of 0.4 MFE-A shares per ProSieben share. Based on MFE-As Aug. 4 closing price, the total package is valued at around 8.07 ($8.83) per share, representing a 24 percent premium over ProSiebenSat.1s March 26 share price. The offer also exceeds all-cash counterbid of 7 ($7.66) per share from Czech investment firm PPF IM, which the companys board has not supported MFE already owns just under 30 percent of ProSiebenSat.1 and has been steadily increasing its stake over the past several years. The company already controls Mediaset, Italys largest TV broadcaster, and Spains No. 1 commercial network Telecinco. With the addition of ProSiebenSat.1, MFE would become the third-largest commercial TV company in Europe, behindRTL(owned by German media giant Bertelsmann) and the U.K.s ITV.

The company has positioned the ProSieben takeover as a critical step in its broader effort to consolidate Europes fragmented commercial television landscape. While RTL and ITV have focused on expanding their pay-TV and streaming services, MFEs strategy has been to double down on their free-to-air business, betting that by creating cross-border synergies between national TV giants, and pooling advertising, content, and technology resources, they will be able to better compete with U.S. streaming giants. Berlusconi has repeatedly stated that scale and cross-national cooperation are essential for the survival of European broadcasters amid growing digital competition.

The endorsement by ProSiebenSat.1 is contingent on MFEs expected cost synergies of roughly 150 million ($174 million) annually on an EBIT basis, achievable over four to five years, contingent on full legal integration into MFE. However, the boards acknowledged the risks involved, including regulatory hurdles and execution challenges, and noted that any potential revenue synergies could not yet be quantified due to insufficient data.

MFEs cross-border strategy has met resistance in Germany, where previous efforts to integrate operations were criticized by ProSiebenSat.1s management and board. In 2023, ProSiebens leadership openly rejected MFEs push for deeper integration, citing concerns over governance and independence.

The latest recommendation marks a significant shift and signals a potential breakthrough for MFEs long-held ambitions to link up free-TV markets across Europes largest territories.

ProSieben shareholders have until Aug. 13 to accept MFEs offer.