UPDATE 1-ProSieben shares rally 9% on CEO Conze’s departure

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By Alexander Hübner and Douglas Busvine

MUNICH/BERLIN, March 27 (Reuters) – Shares in ProSiebenSat.1 Media rallied by 9% on Friday after the abrupt departure of Chief Executive Officer Max Conze ended a drama-filled tenure that led his deputy to chide a “boardroom soap opera” at the German broadcaster.

ProSieben announced in a late-night statement that Conze, 50, was leaving with immediate effect and Chief Financial Officer Rainer Beaujean – who joined last July from a packaging company – would assume his responsibilities.

Conze had sought to accelerate a pivot to digital commerce and advertising to offset a relentless decline in ProSieben’s core commercial TV franchise, but while this preserved top-line growth it squeezed profitability.

The recent announcement of the $500 million takeover of New York dating app developer Meet Inc incurred the disapproval of Italian broadcaster Mediaset, which took advantage of a precipitous decline in ProSieben’s share price to up its stake to 20%.

Sources close to Mediaset, which is controlled by the family of former Italian Prime Minister Silvio Berlusconi, have made it clear that ProSieben should focus on its core media business and that they expected a change of course.

The Italian company has exerted steady pressure on ProSieben, resisted by Conze, to join a European media holding it is setting up to fight back against U.S. streaming giants led by Netflix.

In a statement issued after a supervisory board meeting on Thursday evening, Beaujean said ProSieben “will now return to focusing more strongly on our core segment of entertainment and on sustainably profitable business”.

“While the corona pandemic poses a huge challenge for us in the weeks and months ahead, I firmly believe that we will emerge from this crisis all the stronger and return to generating shareholder value,” Beaujean added.

ProSieben has yet to give guidance on how the coronavirus pandemic will affect its business outlook. Its shares, which have lost nearly half their value in the current year to date, rallied by 9%.

REVOLVING DOOR

Conze’s grip on the business had visibly loosened of late, with hand-picked allies he brought in from Dyson, the UK vacuum cleaner maker he headed before joining ProSieben in mid-2018, exiting the business.

Deputy CEO Conrad Albert dealt a decisive blow to Conze’s prospects by criticising ProSieben’s “boardroom soap opera” in a recent newspaper interview. The company took no action for days before saying Albert would leave by mutual consent.

On a personal level, Conze is nursing financial losses after backing his own turnaround plan by investing 2 million euros ($2.20 million) of his own money in ProSieben stock. Adding injury to insult, he broke his leg on a year-end skiing trip.

Underscoring its renewed focus on its core entertainment business, ProSieben said that entertainment chief Wolfgang Link had been promoted to the executive board along with chief human resources officer Christine Scheffler.

ProSieben’s e-commerce bets bundled into its NuCom division – which include dating, sex toys and price comparison sites – will be sold off in due course, the company said.

Investor General Atlantic is a minority partner in NuCom. ($1 = 0.9079 euros) (Reporting by Bhargav Acharya in Bengaluru Additional reporting by Elvira Pollina and Klaus Lauer Editing by Maju Samuel and Michelle Martin)