By Elvira Pollina

MILAN(Reuters) -MFE-MediaForEurope, the TV group controlled by Italy's Berlusconi family, has made a low-ball bid for shares in ProSiebenSat.1 it does not already own as part of its plan to tighten its hold on the German broadcaster.

MFE, which owns commercial TV operations in Italy and Spain, is looking to create a pan-European advertising-funded broadcaster under a strategy championed by Chief Executive Pier Silvio Berlusconi.

Berlusconi sees European expansion as the response to increasing dominance of U.S. streaming giants such as Netflix, and the flight of advertising budgets to the likes of tech powerhouses Facebook and Google.

The price offered by MFE, which already owns nearly 30% of the rival, will be equal to the volume-weighted average price of ProSieben shares over the past three months, the minimum level allowed under German takeover law.

The price offered is expected to amount to around 5.7 euros a share, a person close to the matter said, against Wednesday's closing price of 6.5 euros a share for ProSieben, equivalent to a total market value of 1.5 billion euros.

The offer will be 78% cash, with the remainder in new MFE 'A' shares.

MFE said it had separately clinched a binding agreement to buy shares from an existing ProSieben investor that would take its stake above the 30% threshold - which commands a takeover - regardless of the outcome of the offer.

This means that, once the offer lapses, MFE would have its hands free to buy additional shares on the market as and when it chooses, without having to repeat a formal offer to all investors.

"The stake raising and the subsequent bid are essential steps to support ProSiebenSat.1 with a constructive approach and to create value for all shareholders, before it is too late," Berlusconi said in a statement.

ProSieben, which also operates in Austria and Switzerland, has resisted MFE's calls to join its pan-European project, striving to remain independent.

Since MFE first invested in the company in 2019, shares in the Bavaria-based broadcaster have lost nearly 50% of their value.

MFE, which started studying an offer for ProSieben more than a year ago, has been urging the German peer to focus on its core TV business and speed up a turnaround centred on asset sales, which the company kicked off this month.

MFE has not played a direct role in steering ProSieben's strategy, despite its sizeable investment. It said a higher stake would help it to be more active in the future.

MFE has its roots in the television business founded in the late 1970s in Milan by late media mogul and Italian Prime Minister Silvio Berlusconi.

The bid for ProSieben is the first major strategic move undertaken by MFE since the death of its founder in 2023.

(Reporting by Elvira Pollina in Milan and Alexander Huebner in MunichEditing by Valentina Za and Keith Weir)