Telegraaf Media: unreality show
Two bidders are fighting over a group where revenues are in decline
In the Big Brother reality television show, contestants often overreact to the most minor provocations. John de Mol, the creator of the format, could be accused of something similar. On Monday, the Dutch billionaire said he would bid for Telegraaf Media Groep, largest publisher in the Netherlands.
His €5.90 a share cash bid easily trumps a €5.25 offer from Mediahuis, a privately owned Belgian conglomerate that already owns 41 per cent of TMG. The stand-off has echoes of the scrap over RCS Mediagroup in Italy last year. That pitted an industry rival, Cairo Communications, against a group of financial investors. Cairo won.
RCS came with a trophy asset, Corriere della Sera, plus a notable position in sports newspapers. TMG likewise brings de Telegraaf, Holland’s leading daily, and an interesting line in puzzle magazines. It prints 86m of these each year, and they are the only major part of the business where revenues have grown. But they are not big enough to offset the drop in newspaper advertising, which fell more than a fifth in the half-year to June 2016. There is no equivalent of the online classifieds businesses that have helped Germany’s Axel Springer or Norway’s Schibsted weather the decline of print.
Buying TMG would give Mediahuis a 40 per cent market share in the Netherlands. Like Cairo, it would reap cost savings too. For Mr de Mol, who has amassed a 20 per cent stake, the benefits are less clear. His company, Talpa, has some overlap with TMG via its participation in a radio venture, but Talpa already controls that entity. His bid appears to be more about keeping TMG in Dutch hands, a sensitive issue given that Belgian groups already control rival papers Algemeen Dagblad and de Volkskrant.
Before the bids, TMG’s stock price was €3.50, having fallen from a 2013 peak of more than €10 in virtually a straight line. Both bidders have deep pockets. Other shareholders will be hoping this series runs for a while yet.