France: New regulations could affect M6 sale

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There is much speculation in the French press that changes in the country’s channel/media ownership regulations could affect the potential sale of free-to-air network M6.

An article in Les Echos suggests that Bertelsmann’s CEO Thomas Rabe expects a decision to be taken during this current half-year regarding the disposal of M6. The decision is important given that M6 is traditionally the most profitable French privately-owned TV channel.

Les Echos, quoted by investment bank Exane/BNPP in a note to clients, says the interested parties in acquiring M6 (currently majority owned by RTL) includes TF1 and Vivendi, as well as Iliad-Free founder Xavier Niel, the production house Mediawan, KKR, Matthieu Pigasse and Pierre-Antoine Capton as well as Daniel Křetínský. Mediaset, NRJ and Altice reportedly also submitted bids but seem to be less keen on actually pursuing an acquisition.

The bank’s note adds: “Bertelsmann thus can opt either for an industrial deal with TF1 and Vivendi which is likely leading to many hurdles with the competition authority and it is unclear whether the deal would pass at all. Alternatively, the group could favour a quick deal with Niel or Kretinsky, which is unlikely to see many competition or other authority hurdles. That said a potential deal with TF1 would underpin the group’s market consolidation strategy but such a deal would encounter multiple regulatory issues and would require law changes. That said in a separate article in les Echos, the CSA, the French audio-visual regulator, calls for a change of rules in the number of FTA channels a group can hold, which is one of the points that would make a TF1 deal unlikely under the current set of rules.”

Exane/BNPP says its own view is that while a potential deal with TF1 or Vivendi could potentially drive the price of M6, the regulatory hurdles could make this deal difficult and it would likely span over a long (too long?) time period.

“It is clear that the comments from the CSA to change the rules of the game regarding FTA channels likely fuels the share price of M6 again as a deal with TF1 would seem more likely in that case,” concludes the bank,


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