French TV shares slide after merger to defy Netflix collapse

A view shows the headquarters of French television group M6 in Neuilly-sur-Seine, near Paris, France, May 21, 2021. REUTERS/Sarah Meyssonnier/File Photo

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PARIS/MILAN, Sept 19 (Reuters) – A failed deal to form a French television giant to challenge U.S. streaming services such as Netflix (NFLX.O) has sent shares of the M6 ​​group ( MMTP.PA) and TF1 (TFFP.PA) On Monday.

France’s two biggest private broadcasters backed out of their merger plans on Friday, citing French antitrust requirements that made the deal unworkable.

Like other local broadcasters in Europe, M6 and TF1 are struggling to stay competitive as global video platforms increase their industry dominance and a merger has been seen as a response to these challenges. Read more

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“It is extremely disappointing, it shows France’s inability to push a unifying project to create a French media champion,” said Mikael Jacoby, head of continental trading at Oddo Securities.

At 2:24 p.m. GMT, TF1 shares were down 3.3% and M6 shares were down 3%.

The failed talks came as Netflix and rival Disney+ prepare to launch an ad-supported subscription offer for their viewers, potentially eroding TF1 and M6’s ad market share, Conor O’Shea noted. , Kepler Cheuvreux analyst.

O’Shea added that German media group Bertelsmann (BTGGg.F) needed to find a buyer early next year for the 48.3% stake it holds in M6 through its RTL unit, as the renewal of M6’s broadcast channel license will lead to a five-year ban on all sales.

“They need to find a buyer who will pose fewer competition concerns,” said a Paris-based competition lawyer, noting that timing constraints meant the terms of a new deal were likely to be less beneficial for the German group.

On Friday, Bertelsmann said “creating national media champions to compete with global platforms” remains part of his strategy to which he remains “firmly committed.” RTL announced on Monday that it would meet the M6 ​​management team and assess its options.

Bertelsmann shares fell 1.3%.


Investors doubt a new suitor can be found in time and fears of a Eurozone recession have hit media stocks hard.

“Hedge funds don’t want exposure to the advertising industry, people are very worried about next year,” said a merger arbitrage analyst.

The pressure also mounted on TF1.

“One thing is certain, the abandonment of this M&A operation is a bad thing for TF1, which would – in the event of the sale of M6 to a competitor – face increased competition”, declared Stéphane Ekolo, global equity strategist at Tradition in London.

The M6-TF1 deal has come up against stiff opposition from French media group Vivendi (VIV.PA) which is now itself listed, along with billionaire Patrick Drahi-owned Altice, as a potential buyer. , if Bertelsmann pursues its plan to sell its majority stake in M6.

Italian media conglomerate MediaForEurope, which is calling for cross-border deals rather than national consolidation to tackle problems in Europe’s TV industry, is also seen as a potential candidate for a deal by market watchers.

Formerly known as Mediaset, MFE was in the running when the M6 ​​first went on sale.

MFE shares rose more than 6% on Monday.

MFE, Vivendi and Altice declined to comment.

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Reporting by Julien Ponthus in Paris, Elvira Pollina in Milan and Klaus Lauer in Berlin; written by Tassilo Hummel, editing by Sudip Kar-Gupta, Jason Neely and Susan Fenton

Our standards: The Thomson Reuters Trust Principles.

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