ProSiebenSat.1 Media AG, the German broadcaster controlled by KKR & Co. (KKR:US) and Permira Advisers LLP, fell from a 12-year high after Liberum Capital Ltd. said the country’s advertising market may weaken before an election.
ProSiebenSat.1 dropped as much as 5.9 percent to 33.34 euros, the steepest intraday decline since Feb. 14, and was trading down 4.5 percent at 3 p.m. in Frankfurt, valuing the company at 7.41 billion euros ($9.75 billion). Volume exceeded the three-month daily trading average by 63 percent. The stock cost 35.44 euros at the close on July 19, the highest price since February 2001.
Germany’s federal parliamentary ballot is scheduled for Sept. 22. Advertising companies Interpublic Group of Cos. (IPG:US) and Omnicom Group (OMC:US) predicted last week that there will be “some pressure” in Germany’s market in advance of the vote, Ian Whittaker and Lisa Hau, London-based analysts at Liberum, said in a research report today.
“Advertisers are concerned about the macroeconomic picture, and don’t like the uncertainty before elections,” potentially discouraging them from paying to promote products, Whittaker said by phone.
The analysts reduced their recommendation on ProSiebenSat.1 stock to hold from buy, as the stock is at about their fair-value estimate of 35 euros.
ProSieben, which mainly competes with publisher Bertelsmann SE’s broadcasting unit RTL Group SA (RTL) in Germany, reported first-quarter sales that exceeded analysts’ estimates as German television-advertising revenue increased. Sales at the Munich-based company rose 13 percent to 563 million euros in the three months through March, ProSieben said in May.
The company holds its annual shareholders meeting tomorrow in Munich, followed by an extraordinary session at which owners of the company’s preferred stock will vote whether to convert those shares into registered voting common stock.
As the common stock is held mostly by KKR and Permira, the firms will probably “sell down their stake, presumably through market placings,” Whittaker and Hau said in the report.
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