European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

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

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

<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

<ul>
<li>
<a href="https://www.smartkarma.com/entities/mediaset-spa" target="_blank" data-smartkarma-citation="entities:21207:1" rel="noopener">Mediaset SpA (MS IM)</a> intends to launch a takeover bid for <a href="https://www.smartkarma.com/entities/mediaset-espana-comunicacion-s" target="_blank" data-smartkarma-citation="entities:21300:1" rel="noopener">Mediaset Espana Comunicacion S (TL5 SM)</a>. Consideration is €1.86 + 4.5 MFEA IM (€5.613 based on €0.834/ordinary share A).</li>
<li>12% premium. Conditional on reaching 90% of voting rights (excluding those already controlled by MFE, implies 39.88%). Cash component to be fully funded by target's net cash position.</li>
<li>The offer price seems reasonable. <strong>Gross spread is 7.3%</strong>, an interesting level considering that the offer will likely be successful and Mediaset España delisted in less than 6 months.</li>
</ul>



Mediaset SpA (MS IM) intends to launch a takeover bid for Mediaset Espana Comunicacion S (TL5 SM). Consideration is €1.86 + 4.5 MFEA IM (€5.613 based on €0.834/ordinary share A).
12% premium. Conditional on reaching 90% of voting rights (excluding those already controlled by MFE, implies 39.88%). Cash component to be fully funded by target's net cash position.
The offer price seems reasonable. Gross spread is 7.3%, an interesting level considering that the offer will likely be successful and Mediaset España delisted in less than 6 months.


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.

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

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: Second Time Around

MFE will launch a voluntary takeover bid for the 44.3% of the capital of Mediaset España that it does not control. This time, without the...

Jesus Rodriguez Aguilar

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52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

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: Second Time Around

MFE will launch a voluntary takeover bid for the 44.3% of the capital of Mediaset España that it does not control. This time, without the...

Jesus Rodriguez Aguilar

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