Axel Springer : Speculations Over Relinquishment Of Control Completely

German publisher Axel Springer said that speculation it could relinquish control over its business was “completely unfounded”, after the Wall Street Journal reported it is in merger talks with ProSiebenSat.1.

The ProSiebenSat. 1 Group owns TV channels including SAT.1, ProSieben, Kabel Eins, Sixx, and ProSieben MAXX and operates video-on-demand portal Maxdome.

A renewed merger attempt comes nearly a decade after Springer’s quest to buy the broadcaster was turned down by German antitrust authorities. While that deal was motivated by the urge to build a counterweight to Bertelsmann SE, ProSieben and Springer are now seeking to increase their heft as consumers turn to Google Inc.’s YouTube and social media for content. Earnings before interest, tax, depreciation and amortisation at its paid models unit – which includes Bild and Die Welt as well as its global press holdings, accounting for about half of the group’s earnings – fell from €250 million to €244 million previous year.

However, the reports had said that negotiations remained at an early stage yet and could still break down.

ProSieben and Axel Springer declined to comment on Monday evening.

“We think there is a chance something may be allowed this time”, Liberum Capital Ltd. analysts Ian Whittaker and Annick Maas wrote in a note. Last year, Springer acquired news channel N24 from ProSieben.

A key question that would need to be resolved in any merger is the future role of Friede Springer, widow of the company’s founder, who controls the company. Mathias Doepfner, the Axel Springer CEO and close confidante of Friede, also owns a 3% stake in the company and is one of the top five shareholders.

Axel Springer’s TV interest may be very small compared with ProSieben’s but the KEK made clear this year that its analysis finds that broadcast television continues to have an overwhelming influence on shaping public opinion despite increasing use of online media on smartphones and tablets.