European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

Mediaset España Comunicación, S.A. / Event-Driven

<ul>
<li>TL5 holdouts have exposed themselves to being trapped by MFE, which has already shown in the past that it has no qualms about running its subsidiary for its own interests.</li>
<li>The implied exchange values the audiovisual business of TL% at 1.2 EV/22eEBITDA TL5/MFEA spread is +3.02%, I would wait for it to turn negative to open a position.</li>
<li>MFE A shares are trading at a 34.7% discount, which seems excessive nevertheless. With more A shares coming in the market (and higher liquidity), I would be long MFEA/short MFEB.</li>
</ul>


TL5 holdouts have exposed themselves to being trapped by MFE, which has already shown in the past that it has no qualms about running its subsidiary for its own interests.
The implied exchange values the audiovisual business of TL% at 1.2 EV/22eEBITDA TL5/MFEA spread is +3.02%, I would wait for it to turn negative to open a position.
MFE A shares are trading at a 34.7% discount, which seems excessive nevertheless. With more A shares coming in the market (and higher liquidity), I would be long MFEA/short MFEB.


MFE/​Mediaset España: Merger Approval, Spread and Delisting

<ul>
<li>MFE waived the minimum acceptance condition of the takeover bid for Mediaset España and acquired all of the shares that accepted the offer (27.23% of the share capital).</li>
<li>MFE will own 82.92% (thus not reaching squeeze-out threshold), the stock is much less liquid now. TV advertising looks increasingly grim in Spain. I would be short up to €2.8/share.</li>
<li>MFE A shares are trading at a 30% discount, which seems excessive. With more A shares coming in the market (and higher liquidity), I would be long MFEA/short MFEB.</li>
</ul>


MFE waived the minimum acceptance condition of the takeover bid for Mediaset España and acquired all of the shares that accepted the offer (27.23% of the share capital).
MFE will own 82.92% (thus not reaching squeeze-out threshold), the stock is much less liquid now. TV advertising looks increasingly grim in Spain. I would be short up to €2.8/share.
MFE A shares are trading at a 30% discount, which seems excessive. With more A shares coming in the market (and higher liquidity), I would be long MFEA/short MFEB.


MFE/Mediaset España: Offer Results and Trade Ideas

<ul>
<li>MFE improves the cash component to €2.16/share, taking the package value to €4.75 (6 June). The acceptance period has been suspended; the CNMV will inform of the new acceptance period.</li>
<li>The sweetened price seems more reasonable. The Board of Mediaset España is now minded to recommend the offer, but the low valuation of both companies does not help the deal.</li>
<li>Holdouts may expose themselves to being trapped in a group with an even stronger control by MFE with no qualms about running its subsidiary for its own interests.</li>
</ul>


MFE improves the cash component to €2.16/share, taking the package value to €4.75 (6 June). The acceptance period has been suspended; the CNMV will inform of the new acceptance period.
The sweetened price seems more reasonable. The Board of Mediaset España is now minded to recommend the offer, but the low valuation of both companies does not help the deal.
Holdouts may expose themselves to being trapped in a group with an even stronger control by MFE with no qualms about running its subsidiary for its own interests.


MFE/​​Mediaset España: Sweetened Offer

<ul>
<li>On 26 May, the CNMV authorized the bid. The offer period will end on 28 June. Mediaset España shareholders do not seem very excited about the offer though.</li>
<li>Analysts' median TP (Refinitiv) of Mediaset España  is €6.58/share, vs. the package worth €4.452 as of 30 May, 19.4% below value upon offer announcement. Market sentiment is negative.</li>
<li>As of 30 May, risk arb spread is 4.2% (MFE dividend not included). It seems increasingly unlikely that the offer is successful and Mediaset España delisted, in my view.</li>
</ul>


On 26 May, the CNMV authorized the bid. The offer period will end on 28 June. Mediaset España shareholders do not seem very excited about the offer though.
Analysts' median TP (Refinitiv) of Mediaset España  is €6.58/share, vs. the package worth €4.452 as of 30 May, 19.4% below value upon offer announcement. Market sentiment is negative.
As of 30 May, risk arb spread is 4.2% (MFE dividend not included). It seems increasingly unlikely that the offer is successful and Mediaset España delisted, in my view.


MFE/​Mediaset España: Start of Offer Period with Lower Success Expectations

<ul>
<li>MFEA lower-voting ordinary shares are trading at a 33.6% discount relative to the MFEB high-ordinary shares, which seems excessive (and above the 32% average since listing of A-shares).</li>
<li>If the offer for TL5 SM succeeds, MFEA would represent 0.68x the number of MFEB and 6.81x the number of votes of MFEB, thus increased percentage of votes and liquidity.</li>
<li>Estimated settlement of the takeover is 1 September. I target a 25% discount and recommend long 1 MFEA IM/short 1 MFEB IM.</li>
</ul>


MFEA lower-voting ordinary shares are trading at a 33.6% discount relative to the MFEB high-ordinary shares, which seems excessive (and above the 32% average since listing of A-shares).
If the offer for TL5 SM succeeds, MFEA would represent 0.68x the number of MFEB and 6.81x the number of votes of MFEB, thus increased percentage of votes and liquidity.
Estimated settlement of the takeover is 1 September. I target a 25% discount and recommend long 1 MFEA IM/short 1 MFEB IM.


Media for Europe: Catalyst for Tightening of the Discount of A Shares

Spain

Mediaset España Comunicación, S.A., a television broadcaster, conducts television, cinema and music production operations.  The Company owns and operates the Spanish television station Telecinco as well as media and advertising companies.

Mediaset España Comunicación, S.A. (TL5 SM)

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Mediaset España Comunicación, S.A. (TL5 SM)

MFE/Mediaset España: Merger Approval, Spread and Delisting

TL5 holdouts have exposed themselves to being trapped by MFE, which has already shown in the past that it has no qualms about running its...

Jesus Rodriguez Aguilar

MFE/Mediaset España: Offer Results and Trade Ideas

MFE waived the minimum acceptance condition and will own 82.92%. The stock is less liquid now, which together with increasingly grim prospects...

Jesus Rodriguez Aguilar

MFE/Mediaset España: Sweetened Offer

MFE sweetness the offer in small steps to ensure success. It has now increased the cash consideration in order to revive the deal.

Jesus Rodriguez Aguilar

MFE/Mediaset España: Start of Offer Period with Lower Success Expectations

The offer period has started, but MEdiasset España shareholders do not seem too keen on the offer as the consideration package is c. 20% below its...

Jesus Rodriguez Aguilar

Media for Europe: Catalyst for Tightening of the Discount of A Shares

In the event that the offer for TL5 is accepted by all shareholders, the number of low-voting MFEA would increase relative to high-voting MFEB, and...

Jesus Rodriguez Aguilar

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

MFE/​Mediaset España: Merger Approval, Spread and Delisting

TL5 holdouts have exposed themselves to being trapped by MFE, which has already shown in the past that it has no qualms about running its...

Jesus Rodriguez Aguilar

MFE/Mediaset España: Offer Results and Trade Ideas

MFE waived the minimum acceptance condition and will own 82.92%. The stock is less liquid now, which together with increasingly grim prospects...

Jesus Rodriguez Aguilar

MFE/​​Mediaset España: Sweetened Offer

MFE sweetness the offer in small steps to ensure success. It has now increased the cash consideration in order to revive the deal.

Jesus Rodriguez Aguilar

MFE/​Mediaset España: Start of Offer Period with Lower Success Expectations

The offer period has started, but MEdiasset España shareholders do not seem too keen on the offer as the consideration package is c. 20% below its...

Jesus Rodriguez Aguilar

Media for Europe: Catalyst for Tightening of the Discount of A Shares

In the event that the offer for TL5 is accepted by all shareholders, the number of low-voting MFEA would increase relative to high-voting MFEB, and...

Jesus Rodriguez Aguilar

MFE/Mediaset España: Merger Approval, Spread and Delisting

MFE/Mediaset España: Sweetened Offer

MFE/Mediaset España: Start of Offer Period with Lower Success Expectations