Cursed merger: the war with Vivendi forces Berlusconi to buy his 29% stake in Mediaset

A new challenge of the last meeting of Mediaset Spain moves away again the start-up of the new merged company.

Silvio Berlusconi, founder and president of Mediaset.

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.

Vivendi again challenges the merger of Mediaset and paralyzes (again) the union with Italy

They challenge the social agreements adopted by the Extraordinary General Meeting of Mediaset España held on February 5.

New setback for the merger of Mediaset Spain with its headquarters in Italy. The operator has communicated this Tuesday to the Spanish CNMV that it has received a demand for livedcontesting the social agreements adopted by the Extraordinary General Meeting of Mediaset Spain held on February 5, 2020.

The agreements of this meeting precisely corrected some formal aspects of the merger proposed a year ago and that had previously also been contested by the French audiovisual company itself.

This challenge returns to stop the clock of the merger and adds a new element in the judicial war in which the two companies have embarked. lived has requested to paralyze the merger with precautionary measures, which will be seen in court on July 22.

In June of last year, Mediaset approved create a pan-European audiovisual giant by integrating its companies in Italy and Spain under the new name of Mediaforeurope. The company will have a tax base in Italy, but will be incorporated in the Netherlands, although it will continue to be listed in Italy and Spain.

Mess with Vivendi

Mediaset indicated that the union of its two companies “opens business development possibilities difficult to achieve separately and will surely allow increased investment 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”.

However, the integration is completely paralyzed by the successive challenges of Vivendi, shareholder of Mediaset Italia and minority shareholder 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.

power struggle

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.

To complement the lock on Italy, Vivendi decided to buy a 1% stake in Mediaset Spain in the summer, which gave him the legal backing to challenge the board’s agreements and block the pan-European merger.

In this way, the process has become entrenched in the Spanish and Italian courts -and even more so with this new blockade- after almost six months in which an amicable solution and an agreement that allows the demands to be withdrawn have been tried without success. It is the only possibility of carrying out a merger that seemed safe, but now seems almost impossible.

Mediaset indicated that the union of its two companies “opens business development possibilities difficult to achieve separately and will surely allow increased investment 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”.

However, the integration is completely paralyzed by the successive challenges of Vivendi, shareholder of Mediaset Italia and minority shareholder 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.

power struggle

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.

To complement the lock on Italy, Vivendi decided to buy a 1% stake in Mediaset Spain in the summer, which gave him the legal backing to challenge the board’s agreements and block the pan-European merger.

In this way, the process has become entrenched in the Spanish and Italian courts -and even more so with this new blockade- after almost six months in which an amicable solution and an agreement that allows the demands to be withdrawn have been tried without success. It is the only possibility of carrying out a merger that seemed safe, but now seems almost impossible.