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Billionaire Who Failed to Buy Metro Bets on Europe’s TV Business

Billionaire Who Failed to Buy Metro Bets on Europe’s TV Business

(Bloomberg) -- Daniel Kretinsky, who owns a $7.8 billion Czech energy conglomerate, bought a minority stake in a leading German entertainment company in a contrarian bet on the future of European television industry.

The billionaire is the largest shareholder in Czech Media Invest, which has bought about 4.1% in ProSiebenSat.1 Media SE, according to a statement late Friday. It’s the first step in CMI’s new strategy to purchase minority shareholdings in the continent’s media companies.

The group, which owns several Czech news publications as well as a stake in French newspaper Le Monde, is diversifying into the nationwide television business, which it sees as able to compete alongside digital platforms to be the dominant advertising format.

“We do not share the skepticism held by the majority of the market as seen through the decline in the valuations of several European television groups,” CMI board member Branislav Miskovic said in the statement.

Kretinsky, with an estimated net worth of $3 billion, holds 50% of CMI, while his long-term investment partner, Patrik Tkac, has a 40% stake. Earlier this year, the duo tried to take over German wholesaler Metro AG, but their 5.8 billion-euro ($6.5 billion) bid was rebuffed.

Going against a prevailing market trend is a hallmark of Kretinsky’s investment strategy. In the last decade, his main business EPH has acquired a number of conventional energy assets across Europe, betting that the region will continue to rely on coal and gas for electricity even as nations push for more use of renewable energy.

In about a decade, a debt-fueled acquisition spree turned EPH from a small Czech utility into one of the biggest power companies in central Europe. It had revenue of 7 billion euros last year and valued its assets in the Czech Republic, Slovakia, Germany, Italy, the U.K., Hungary and Poland at about 13.3 billion euros.

Billionaire Who Failed to Buy Metro Bets on Europe’s TV Business

ProSieben shares have gained 3.5% this month, but the stock is still down 16% since the start of the year, valuing the company at 3 billion euros. Its 15 free and pay channels reach 45 million TV households in Germany, Austria and Switzerland every day, according to CMI data. Last year, ProSiebenSat.1’s digitial platforms achieved 3 billion video views.

”We welcome every investor in P7S1 and see this as a confirmation of our strategy,” ProSieben spokeswoman Susanne Brieu said by phone Saturday.

Via CMI, Kretinsky owns four daily newspapers and several dozen magazines and web titles. The company also has two printing houses and owns major radio stations in the Czech Republic and Romania. Apart from the Le Monde stake, CMI also owns the French version of Elle magazine and the weekly Marianne.

--With assistance from Stephan Kahl.

To contact the reporter on this story: Peter Laca in Prague at placa@bloomberg.net

To contact the editors responsible for this story: Balazs Penz at bpenz@bloomberg.net, John Viljoen, Christopher Elser

©2019 Bloomberg L.P.