Mediaset shareholders are likely to accept conversion of their shares into stakes in the new MediaForEurope (MFE) organisation that will combine Mediaset and Mediaset Espana, even if they chose to retain an option to exercise withdrawal rights that would enable them to cash out before completion, according to analysts at Berenberg.
Berenberg’s analysts, who have been bullish about the potential benefits and synergies that could result from the combination, said that, according to its calculations, Mediaset Espana shareholders could make 27% more by converting than by withdrawing, while Mediaset shareholders could make 29% more.
Berenberg estimates that the number of shares for which withdrawal rights may be exercised could equate to a gross value of €2 billion, far above the cap of €180 million set by Mediaset.
However, it said, comparing the withdrawal price to the current implied MediaForEurope share price, and adding in the value of the dividend, share buyback and net present value of synergies, means that investors choosing to exercise this option will be out of profit.
While Vivendi has been adamantly opposed to the deal, Berenberg questions “whether Vivendi management will be prepared to throw in the towel”, thus foregoing profits and losing influence in the group.
All in all, Berenberg therefore believes that “the probability of the deal completing is reasonably high”.
in addition to using its 9.9% voting rights in Mediaset to oppose the deal, Vivendi took a 1% stake in Mediaset España, enabling it to oppose the agreement, ahead of the deal being approved separately by the Spanish broadcaster’s shareholders two weeks ago. Vivendi accused Berlusconi family investment vehicle Fininvest of a power grab and abusive behaviour, with Mediaset counter- accusing the French media group of making libelous statements.