Advanced Television

Mediaset and Vivendi: “Doubts on MFE”

December 3, 2019

It seems everything is now firmly off the table as far as any discussions are concerned between Mediaset and Vivendi, and with the additional risk that Mediaset’s plans for its ‘MediaForEurope’ platform are now also in jeopardy.

Widespread report are that discussions between the two media giants have collapsed with the attempts at conciliation having failed. The options under discussion – which would have ended a long-running legal dispute between the pair – would have seen (according to analysts at Deutsche Bank):

Vivendi offering to:
(a) sell up to a 20 per cent stake in the Italian Broadcasters at a premium to its current market price, and
(b) not to block the planned merger of Mediaset’s Italian and Spanish units to create the proposed Dutch  MediaForEurope (MFE) business.

“The failure to settle the legal dispute has cast doubt over the creation of the MFE. The disagreement over Mediaset’s repurchase price has led to a breakdown of talks as Mediaset was willing to offer a price equal to its predetermined withdrawal price of €2.77/share whereas Vivendi was seeking price close to the €3.71/share that Vivendi had paid originally to acquire its 28.8 per cent stake (implying an aggregate difference of €320 million between the two prices for a 28.8 percernt stake),” states the bank.

“The lack of resolution is a negative for both parties,” says the bank. “Resolution would have: ended legal costs, Vivendi could have potentially returned ~€1 billion from cash proceeds by exiting the Mediaset stake, a deal with an exit price above the current price was positive for Vivendi’s overall valuations and Mediaset could have proceeded with its planned MediaforEurope combination with Mediaset Espana.”

“Mediaset has scheduled an EGM on 10 January 2020 to amend the articles of association of MfE including the terms & conditions related to special voting shares (SVS). These SVS have been the main subject of disagreement between the two sides, given MFE’s founding shareholders could potentially have 10x voting rights. That said, it is less probable that Vivendi will agree to liquidate the Mediaset stake or avoid legal recourse unless it is paid a price close its original investment value,” suggests the bank’s report.

However, on the sidelines of the deal German broadcaster ProSiebenSat1’s CEO Max Conze is quoted in Sueddeutsche Zeitung saying that he saw no merit in the potential merger. “It wouldn’t be impossible but the modest synergies would not justify a merger, because implementation would be complex, lengthy and expensive”.

Categories: Blogs, Business, Inside Satellite, M&A