MEDIASET (TRADING SHORT)

CLOSING HALF FOR +10.05%

The trading short was based on the fact that a take over was not on the cards. Due to Bollore’s previous stake building strategy and admission that he intended to build his stake to 20%. Added to this was Berlusconi’s blocking stake. So when the muscle flexing/additional buying abated a sell off would ensue.

Vivendi announced that it has reached its 20% stake in Mediaset this morning. Talk of a Mediaset rights issue to fend off Vivendi as Berlusconi gets his gloves on has also helped us this morning.

We use this morning weakness to close half of our position for a 10.05% return in 24hrs.

 

MEDIASET TRADING SELL
WHERE’S THE BEACH?

Monday • 10 August 2015 • 11:47

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.