Mediaset Spain headquarters in Madrid. Portal
Mediaset España this week opens a new and crucial phase in its merger process with Media for Europe (MFE), the audiovisual group controlled by former Italian Prime Minister Silvio Berlusconi, owner of 48% of the transalpine conglomerate via Fininvest. The extraordinary shareholders’ meeting was convened for Wednesday with an important point: the acquisition of Mediaset, a group that operates the broadcasters Telecinco and Cuatro, among others.
From a strategic, operational and industrial point of view, a pan-European giant of information and entertainment media is emerging. MFE, which also owns 25% of Germany’s ProSiebenSat.1 and has its registered office in Amsterdam, aims to scale up with a view to strengthening financial resources and technological investments to be able to operate in local circuits from a better position out to compete while expanding into other European markets.
Framed in the so-called Common Cross-Border Fusion Project, the process by which MFE engulfed Mediaset was long and eventful. In January it received the approval of the boards of directors of both companies, a year after the first merger attempt fell through due to the failure of the parent company’s takeover bid for the 44.3% stake in Mediaset España, which it still did not control. . This offer was presented as a “great opportunity” for shareholders, but was unsuccessful as it failed to meet the target of adding at least 90% of the capital (it remained at 82.92%). At this week’s shareholder meeting, MFE is aiming to gain full control of the company, chaired by Borja Prado, which will no longer exist as an independent company.
The Italian holding company intends to review the organizational and operating model to “capture new growth opportunities, enable agile decision-making and increased responsibility,” according to a notice sent to the National Securities Market Commission (CNMV), but sticks to the merger of employees and managers and undertakes to maintain operations and production activities in the respective countries.
This will be the first shareholders’ meeting in more than two decades where Paolo Vasile, CEO for the last 23 years and one of the bastions of the economic profits accumulated by Mediaset during this period, exceeding 3,700 million euros, will not be present. . . This new phase coincides with a remarkable loss of viewers for Telecinco, the group’s main channel, a situation that the team led by CEO Alessandro Salem, who has taken over part of the functions that were in the hands of Vasile, has taken over wants to turn back with a revised programming strategy. His goal is to make “family, respectful and joyful” television where entertainment sets the pace. The merger of the Italian and Spanish companies will promote synergies, reduce costs and favor technological exchanges and content co-production.
The exchange ratio agreed in the merger process assumes seven MFE A shares, with the same characteristics and with the same rights as the Mediaset España A shares existing at the time of issuance, for each share of the subsidiary. As reported by both companies, the exchange has been calculated based on multiple valuation methodologies and references for MFE and Mediaset España shares, such as analyst ratings. Shareholders who vote against the merger can exercise their right of separation. The redemption price to be paid is EUR 3.26 per share, which corresponds to the average quoted price of the share in the months before the draft terms of merger were signed and announced.
For Berlusconi, the merger will pave the way for an integrated operational strategy and centralized decision-making. MFE points out that its pan-European profile will help broaden business options and thus leverage the advantage of being the first agent to take this step in the media environment. The company estimates that “internationalization, economies of scale and the ability to offer products adapted to technology and quality content” are key factors to compete in the current media ecosystem, characterized by a decline in linear television and a strong advance of video platforms on the Internet like Netflix, HBO or Amazon Prime.
In Spain, the new transnational giant has seven free-to-air TV channels (Telecinco, Cuatro, Energy, FDF, Be Mad, Divinity and Boing) that reached 26.2% of viewers last year, which is one point less than Atresmedia , its main competitor , which also has one less channel. In addition to the Open Channels, Mediaset is involved in television production companies, publishes the digital newspaper Nius, runs a news agency, operates the advertising business and has a film division. She closed last year with a profit of 178 million euros.
After the merger, the board of MFE will remain unchanged. Its President will continue to be Fedele Confalonieri and Pier Silvio Berlusconi will act as CEO. The company, controlled by the Berlusconi family and listed on the Milan stock exchange, will increase its share capital by 22 million euros after the new shares have been floated. The current issued share capital is 800 million (divided into 2,707,506,599 shares, of which 1,526,279,035 are A shares and the rest are B shares), while that of Mediaset España is 156 million.
Follow all information from Business And Business on Facebook and Twitteror in our weekly newsletter
Five Day Program
The most important economic dates of the day, with the keys and context to understand their scope.
RECEIVE IT IN YOUR MAIL