MFE (Media for Europe), the media group headed by former Italian Prime Minister Silvio Berlusconi, will try to take over all of Mediaset España, of which it currently already controls 56%. With a statement sent this Tuesday afternoon to the National Securities Market Commission (CNMV), MFE makes official the launch of a takeover bid for 100% of its Spanish subsidiary, owner of the Telecinco and Cuatro networks, among others. Mediaset España’s listing has been suspended since Monday morning, when the Bloomberg agency announced the possibility of launching this operation, citing sources close to it.
That movement of the CNMV was responded with a statement from MFE in which it confirmed that its council, which has Pier Silvio Berlusconi, son of the Italian tycoon, as its top executive, would meet between this Monday and this Tuesday to “address the strategy of the company about its participation in Mediaset España”. A day later, the decision adopted is already known: the Milan-based group is willing to pay 5,613 euros for each of the shares it does not yet own in Mediaset España, which raises the price of the operation, if it were done with all of them, to almost 778.9 million euros.
However, only part of that amount corresponds to cash disbursement. What MFE offers to the minority shareholders of Mediaset España is to buy each share in exchange for 1.86 liquid euros and 4.5 ordinary A shares of the parent company (which means valuing these shares at 0.834 euros, which are listed in Milan and closed on Monday, before being suspended this Tuesday, at 0.840 euros). That is what the 5.613 euros per share would add, which means, according to the statement sent to the CNMV, 12.1% more than they were worth at the end of Friday. This Monday, when the stock market regulator suspended the listing of the Spanish company, each share was paid at 5.12 euros. On the weighted average price of the last three months (4,316 euros), the premium is calculated at more than 30%.
The operation, which is conditional on reaching at least 90% of the shares (MFE now has 56%), would entail a maximum cash payment of just over 258 million and the issuance of more than 624 million new ordinary A shares. in the Italian matrix. This would equate to 4.7% of the post-takeover bid voting rights, leaving Fininvest (the investment arm of the Berlusconi family), which currently controls 50.9% of those rights, below half. However, since each Mediaset share is exchanged for 4.5 MFE, the possibility of compensating in cash the half share not received by those sellers who offer an odd number of shares is contemplated, which would somewhat alter these payment forecasts .
It is not the only operation in which MFE is immersed at the moment. The group has also requested authorization this month to increase its presence on the German channel Prosieben. Likewise, it has 100% of its Italian subsidiary Mediaset, owner of some of the largest chains and commercial radio stations in the country. In Spain, in addition to Telecinco and Cuatro, it has Be Mad, FDF, Energy, Divinity and the children’s channel Boing.
Sources close to the operation point out that MFE’s objective is to “capture a pan-European group of media and entertainment”, with a sector that is experiencing the full effervescence of American platforms such as Netflix, HBO or Disney. What Berlusconi intends, therefore, is to gain size to compete with the new giants of the entertainment industry and not increase his power over the Spanish business, they argue, among other things because he already has control (Fininvest owns the majority of voting rights in MFE and this, in turn, in Mediaset España). Among the financial advantages, there is a synergy of savings and costs as a result of the greater integration between Mediaset and Mediaset España, which will reach, four years after the completion of the operation, at least 55 million euros.
He knows in depth all the sides of the coin.
Although acquiring 100% of Mediaset España would mean taking it off the stock market, the aforementioned sources indicate that MFE is willing to maintain an independent board in the Spanish subsidiary, as well as employment and content production, which could benefit from greater investments. These would be necessary, among other things, to have platforms for streaming and content capable of reaching large audiences in the different European markets. It is something that HBO or Netflix already achieve, while European groups, with origins in traditional television networks, have a much more fragmented presence. The takeover bid is subject to the approval of the CNMV and to be completed, it must also have the approval of the MFE board at the time. It is the second time that the Italian parent company has tried to consolidate its Spanish business, after a court in 2019 paralyzed an attempt to merge the Spanish and Italian subsidiaries.