The Game In Play Is Setting Pieces On The Board

Michael Hedges January 25, 2021 Follow on Twitter

Mergers and acquisitions in the media sphere have been moving toward more strategic dimensions. That’s not to say tactical competitive deals are out. These are just on the backburner as national competition authorities press harder on operational issues like employment and debt. As usual, banks and investment funds are cleaning up, literally and figuratively. There are targets of opportunity and many games to play.

Debt-laden Spanish media house Grupo Prisa has a new shareholder. Just as big bank HSBC shed its 7.9% stake in the company, Vivendi picked up a 7.6% stake. All of this happened at the end of last week (January 22). Nobody involved dared suggest a deal had been struck between Vivendi and HSBC.

Grupo Prisa publishes the legacy Spanish newspaper El Pais. It also owns sports outlet Diario, business daily Cinco Dias, several national channels including Cadena SER, a digital TV channel and several Latin American media assets. A week earlier, Grupo Prisa shed its Argentina radio assets. “Economic forecasts for 2021 force the planned budget for this year to be redrawn downward,” said an El Pais management statement, quoted by El Economista (January 23).

Grupo Prisa has many voting shareholders. The most important is hedge fund Amber Capital with a 29.8% stake. Joseph Oughourlian is founder and managing director of Amber Capital. When Javier Monzón was forced out as Grupo Prisa chairman in December, M Oughourlian took the seat, on a temporary basis, of course. Sr Monzón represented the interests of shareholders Banco Santander, HSBC, Prisa founding family Polancos and Mexican billionaire Carlos Slim. Telefónica, the multinational telecom, voted its shares with Amber Capital.

All this brings us back to Vivendi. This huge multimedia conglomerate - everything from Canal Plus and Dailymotion to Havas Group and Universal Music - is principally controlled by Vincent Bolloré. Vivendi has a 28.8% stake in Mediaset, constantly irritating the Berlusconi family and related government agencies, and a 23.5% stake in French media house Lagardère.

Lagardère Group has its own share of boardroom drama, involving both M. Bolloré and M. Oughourlian. The activist duo have tried to change the way the company does business and, perhaps, oust chairman (and heir to the founder) Arnaud Lagardère. French courts have twice (October and December) blocked moves to accelerate board voting. Vivendi and Amber Capital currently hold jointly a 49% stake in the company.

In the midst M Lagardère gained an ally as LVMH chief executive and France’s richest person Bernard Arnault took a €100 million stake in Lagardere Capital & Management, the holding company of the Lagardère family. Qatar Investment Authority holds a 13% stake in Lagardère Group. Then, just after the first of the year the French government gifted Lagardère with a €465 million rescue package, reported AFP (January 3). The stated intent is support during the “economic fallout of the pandemic.” Observing all this carefully, French media watchers noted that the "elites" were bailing out M Lagardère.

Meanwhile on a different side of this chessboard, Mediaset raised its stake in German satellite broadcaster ProSiebenSat.1 as private equity investor KKR exited most of its holding. A plan to consolidate Mediaset broadcast holdings in Italy, Spain and Germany - and based in the Netherlands - was effectively scuttled by M Balloré. KKR is principal shareholder in German publisher Axel Springer. Its effective exit from ProSiebenSat.1 shareholding put an end to rumors of the two German media houses merging.

See also...

• Hot Topics - Media in Spain

• Hot Topics - Media Mergers and Acquisitions

• Hot Topics - Vivendi