Entrepreneur Haim Saban has dropped out of his $2.3 billion contract to buy Germany's biggest broadcaster ProSiebenSat 1 from bankrupt KirchMedia. Saban signed the 40,000-page contract on March 27, 2003 for the acquisition of the broadcaster and its programming rights to approximately 18,000 films and series, the largest film library outside of Hollywood. Over the next two months, Saban did not agree with KirchMedia and creditor banks on "details of the transaction" by the deadline of May 31 for the purchase of ProSiebenSat 1. Saban was given an extension to present his plans to finance the deal. He had been talking to other broadcasters, including France's TF1, and leveraged buyout firms, such as the Carlyle Group, Inc. and Texas Pacific Group, to help him finance the takeover of ProSiebenSat1 and the film rights library. He also asked German regulators to excuse him from having to buy out ProSiebenSat 1 minority shareholders for an additional cost of $500 million.
KirchMedia its creditor banks will now remain in control of the assets. Mediaset, the broadcaster owned by Italian Prime Minister Silvio Berlusconi, Saudi Prince Alwaleed bin Talal and German publisher Heinrich Bauer Verlag had each expressed interest in buying KirchMedia assets before the Saban deal.
The creditors and KirchMedia's topper Hans-Joachim Ziems reportedly are set to manage things and wait for market conditions to improve in a year or two before they try to sell. They will have to come up with up to $350 million to take care of restructuring and keep things running. VARIETY reports that former RTL TV head Helmut Thoma agreed to be on an alternative list of new supervisory board members to be presented at the shareholder's June 16 meeting, in case the Saban takeover failed. Thomas is helping with the restructuring and is rumored to be the next head of ProSiebenSat 1.