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ProSieben says MFE offer not adequate

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MFE looking to build Europan TV champion

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Czech investment firm PPF moved to increase stake

(Adds details from statement, background; MFE declined to

comment)

By Alexander Hübner and Elvira Pollina

MUNICH, Germany, May 22 (Reuters) - The boards of

ProSiebenSat.1 have advised against an "inadequate"

takeover bid from MFE-MediaForEurope, the TV

broadcaster controlled by Italy's Berlusconi family, the German

broadcaster said on Thursday

MFE, which has commercial TV operations in Italy and Spain,

made an offer for ProSieben in March as part of a push to create

a pan-European broadcaster - a strategy resisted by ProSieben,

which is striving to remain independent.

"Both governing bodies have concluded that the offer is

inadequate from a financial perspective," ProSiebenSat.1 said in

a statement, adding that it "does not reflect the expected

future development of the value of the company".

Milan-listed MFE, which holds a 30.14% stake in ProSieben

declined to comment.

Earlier this month, Czech investment firm PPF, which holds a

15% stake in ProSiben, launched a bid to lift its stake in the

German broadcaster up to 29.99%, a move welcomed by

ProSiebenSat.

MFE made a cash-and-share bid at the minimum level allowed

by German takeover rules, offering 4.48 euros in cash and 0.4

MFE A shares per ProSiebenSat.1 share.

That is below the current share price of 7.09 euros and

PPF's offer of 7 euros per share.

Having already crossed a 30% threshold which normally

triggers a mandatory 100% takeover offer under German law, MFE

will have the option to buy additional shares in the market

after the end of its buyout bid.

However, a source close to the matter told Reuters last week

that it is also weighing whether to raise its bid in response to

the counter-proposal by PPF.

MFE is looking to build a European ad-funded TV platform to

resist competition from the likes of U.S. Netflix ( NFLX ) and

is pushing for an accelerated sale of ProSiebenSat.1's online

investments in order to reduce its debt.