MEDIASET TRADING SELL

WHERE'S THE BEACH?

Got to love this muscle flexing between two European titans. But it is important to remember the objectives here. Bollore wants a piece of MS premium for distribution. He has previous with forcing through change by acquiring board seats (see TI), so we might expect him to get to 20% over time, get 2 board seats and put Berlusconi under pressure. However we have to believe he has learnt from his TI mistakes, where he is now heavily under water, and assume he will be more discerning over price for the next 7%.

The fact Berlusconi has 40% now means there is no chance of a takeover, and he already has a blocking stake.

So this additional buying from both is just muscle flexing. MS has added 1.3bn EUR to its market cap in the last 2 days. Most have MS premium (loss making) in their SOTP at less than 500m EUR.

The sticking point over the summer was price amid unrealistic targets. Assuming there is no takeout, it is hard to see what the upside is from here once the dust settles.

TRADING SELL.