When on June 7, 2019 Mediaset announced the merger of its businesses in Italy and Spain to form a new operator, mediaforeurope, He never imagined that a year later they would still be immersed in a tangle of legal messes, contested boards and a project completely dry docked.
In the same way, Silvio Berlusconipattern Mediasetnever imagined that his dream of leading audiovisual production and broadcasting at the European level it was going to remain in a judicial battle that seems to have no solution and that on Tuesday it had a new setback. He never expected that live He would declare a frontal war on them and use all his legal arsenal to stop the operation.
By reporting the merger, Mediaset spoke of business development possibilities “difficult to achieve separately” and to “increase investments in Italy and Spain”. In addition, “all the synergies already foreseen could grow exponentially with the adhesion of a third or fourth country to the project”.
Mediaset and Berlusconi drew up a trans-European project with interests also in Germany through ProSiebenSat1, the main free-to-air private television network in this country and of which they already control 20%. The company would have a tax base in Italybut would be incorporated in the Netherlands, although it would continue to be listed on Italy and in Spain.
But none of this has been possible. A year later they still cannot approve even the first stage of the merger: that of the shareholders’ meeting. livedshareholder of Mediaset Italy and Spainhas become its worst enemy and has blocked the operation in every possible way, which at this point has no sign of coming to fruition if an out-of-court solution is not reached.
Vivendi’s options in Spain
The French giant, run by media tycoon Vincent Bolloreopposes the merger saying that it strengthens the control of the main shareholder of Mediasetthe family of the former Italian Prime Minister Silvio Berlusconi.
For his part, from Mediaset indicates that lived is a potential competitor in the new scenario of Media For Europe (MFE) so you don’t want to create a direct rival.
Fininvestof the family Berlusconiowns 50% of the shares of Mediaset Italy while lived it has 28.8%, but only 9.9% of the voting rights. The rest correspond to a trust of the French group that could not vote in the approval of the merger in the Italian board. In the case of Spain, Mediaset has 52% and Vivendi 1% bought little at the end of last year.
Vivendi’s strategy involves total blockade, according to some market sources, since it wants to boycott an operation that could put its future growth in Europe at risk. For this reason, it has successively challenged all the agreements of the Mediaset Shareholders’ Meetingsboth in Spain and in Italy.
In the Spanish case, Mediaset launched a new Shareholders’ Meeting to modify certain aspects that could justify Vivendi’s veto, but the French operator has returned -for the second time- to challenge the agreements.
Peninsula and Mediobanca
Eight months in which the negotiations have also taken place in private, but without reaching any type of agreement between the parties. This leads to a single solution according to the market sources consulted: that Mediaset or some close group buys 29% of Vivendi to remove them from the equation before starting the merger.
According to the original project, each Mediaset shareholder will receive one share of the new company for each share of the current companies and shareholders that are not Mediaset 2.33 shares of the new company. On Tuesday, Mediaset Italia shares closed at 1.74 euros and those of Spain at 3.64 euros, half of what they were trading for a year ago.
The current capitalization of Mediaset slightly exceeds 2,000 million euros, so a purchase – at current market prices – should be close to 700 million euros. It is clear that any out-of-court settlement with Vivendi should go through withdrawing all challenges and appeals in court, but also include a significant premium for this amount.
In September of last year, Peninsulathe fund led by Borja Prado and former bankers of Midbank, agreed to allocate a reserve fund of 1,000 million euros to facilitate the merger and buy the participation of those who did not agree with the operation. However, the operation had a limit of 5% of the total capital of Mediaset.
In this sense, sources consulted by Invertia indicate that Mediaset is still looking for a partner who can buy the Vivendi package that forces them to sign peace. However, the coronavirus and confinement paralyzed any movement. That is why movements are not ruled out between now and the end of the year, in order to unblock the operation and without the limitations of the state of alarm.