Berlin (Reuters) - ProSiebenSat.1 is taking over further parts of its ailing subsidiary Jochen Schweizer and could swallow up the entire business in the medium term.

An agreement had been reached with the joint US investor General Atlantic to take over its share in the voucher subsidiary for one euro, the head of the Bavarian television group, Bert Habets, said on Friday. This means that ProSiebenSat.1 now directly holds 89.9 percent of Jochen Schweizer mydays. By March 31, 2025, the 10.1 percent stake held by co-shareholder Jochen Schweizer could be acquired personally on the basis of an agreement. A decision on this has not yet been made.

ProSiebenSat.1 also announced on Thursday that it would massively reduce the dividend. The Executive Board and Supervisory Board are proposing only around EUR 11 million to the 2023 Annual General Meeting, compared to EUR 181 million in the previous year. EUR 0.05 (previous year: EUR 0.80) per share is to be distributed and less money is to go to shareholders in the future as well, with more going into investments. This did not go down well with investors. The ProSieben share fell by almost 19 percent at times and headed for its biggest daily loss in 15 years. "ProSieben has killed its share as a dividend stock," said one trader. There were no longer any reasons to hold the shares.

In addition, ProSiebenSat.1 is parting ways with CFO Ralf Gierig with immediate effect and by mutual agreement. The 57-year-old had been with the company for over 20 years and had been on the Executive Board since the beginning of 2022. His successor as of May 1 will be Martin Mildner (53), who was most recently CFO of United Internet.

The sluggish advertising business depressed profits and revenues in 2022, with sales falling by 7.4 percent to 4.16 billion euros and operating profit (adjusted EBITDA) dropping by almost 20 percent to 678 million euros. For this year, the Group is forecasting stagnating turnover of 4.1 billion euros, which could vary by 150 million euros upwards or downwards. The operating profit is likely to fall to around 600 million (plus/minus 50 million) euros.

Regulatory issues regarding Jochen Schweizer mydays' business with vouchers for experiences such as parachute jumps or restaurant visits have recently caused problems. As a result, ProSiebenSat.1 had to postpone the presentation of its balance sheet and was almost temporarily kicked out of the MDax. The question had arisen as to what extent parts of the business activities of Jochen Schweizer and mydays fall under the so-called Payment Services Supervision Act (ZAG). The Group explained that the product range had been adjusted in March and could continue to be operated without permission from the German Federal Financial Supervisory Authority (BaFin).

Both companies are currently coordinating details with BaFin in order to process the voucher products that were issued before the change and required a license from BaFin under the ZAG. "At the same time, ProSiebenSat.1 is currently conducting an independent internal investigation by an external law firm with the aim of clarifying any misconduct," the TV group explained. "In addition, the Munich I public prosecutor's office has initiated a monitoring process," said Habets. The authorities had reacted on their own initiative to ProSiebenSat.1's announcement to postpone the presentation of the balance sheet due to the unresolved issues surrounding Jochen Schweizer. The company cooperated fully with the responsible authorities. "The potential financial burden for the Group in connection with the official investigations cannot yet be estimated, but could be considerable," warned Habets. He could not name a possible sum. However, he does not expect this to affect the annual forecast for 2023.

At the end of March, the Group surprisingly announced job cuts. Habets said that it was not yet possible to give a specific figure. There should be clarity on this before the end of the first half of the year.

(Report by Klaus Lauer, with assistance from Daniela Pegna; if you have any questions, please contact our editorial team at berlin.newsroom@thomsonreuters.com (for politics and the economy) or frankfurt.newsroom@thomsonreuters.com (for companies and markets)).