Mediaset may consider merger with TF1 and Prosiebensat 1 to create pan-European TV group - report (translated)
08 NOV 2018
Mediaset [BIT:MS], the Italian TV broadcaster, is considering a merger with French TV group TF1 [EPA: TFI] and German TV broadcaster Prosiebensat 1 [ETR: PSM], the Italian-language daily Milano Finanza reported. The unsourced report said that the aim of the three-way merger would be to create a pan-European free TV broadcasting group.
The report noted that Mediaset already has a commercial alliance with the two companies. However, the item cited industrial analysts noting that this will not be enough to see off the challenge from US companies like Netflix thereby leading to pressure for a merger.
The item said that the main obstacle to such a merger would working out the stakes held in the new group post-merger. The report said that Mediaset is in the hands of FIninvest, the holding of the Berlusconi family, but that Vivendi [EPA:VIV] is still a potential spoiling presence in the group, with an 8.8% stake in the Italian group and a further 20% stake placed in a trust.
The item said that TF1 is controlled by Bouygues [EPA: EN], which holds a 43.79% stake while ProsiebenSat 1 is controlled by investment funds.
The article said that both Fininvest and Bouygues are likely to want to have 20-25% stakes in the new entity, something that could cause governance problems.
The article added that Mediaset could try to solve the Vivendi issue by speeding up an out-of-court settlement over outstanding issues between the two groups by accepting a EUR 400m - EUR 500m payment.
Mediaset has a market cap of EUR 3.34bn, TF1 has market cap of EUR 1.96bn and ProsiebenSat has a market cap of EUR 4.84bn.
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