European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

<ul>
<li>MFEA lower-voting ordinary shares are trading at a 33.6% discount relative to the MFEB high-ordinary shares, which seems excessive (and above the 32% average since listing of A-shares).</li>
<li>If the offer for TL5 SM succeeds, MFEA would represent 0.68x the number of MFEB and 6.81x the number of votes of MFEB, thus increased percentage of votes and liquidity.</li>
<li>Estimated settlement of the takeover is 1 September. I target a 25% discount and recommend long 1 MFEA IM/short 1 MFEB IM.</li>
</ul>


MFEA lower-voting ordinary shares are trading at a 33.6% discount relative to the MFEB high-ordinary shares, which seems excessive (and above the 32% average since listing of A-shares).
If the offer for TL5 SM succeeds, MFEA would represent 0.68x the number of MFEB and 6.81x the number of votes of MFEB, thus increased percentage of votes and liquidity.
Estimated settlement of the takeover is 1 September. I target a 25% discount and recommend long 1 MFEA IM/short 1 MFEB IM.


Media for Europe: Catalyst for Tightening of the Discount of A Shares

Mediaset España Comunicación, S.A. / Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/mediaset-spa" target="_blank" data-smartkarma-citation="entities:21207:1" rel="noopener">Mediaset SpA (MS IM)</a> intends to launch a takeover bid for <a href="https://www.smartkarma.com/entities/mediaset-espana-comunicacion-s" target="_blank" data-smartkarma-citation="entities:21300:1" rel="noopener">Mediaset Espana Comunicacion S (TL5 SM)</a>. Consideration is €1.86 + 4.5 MFEA IM (€5.613 based on €0.834/ordinary share A).</li>
<li>12% premium. Conditional on reaching 90% of voting rights (excluding those already controlled by MFE, implies 39.88%). Cash component to be fully funded by target's net cash position.</li>
<li>The offer price seems reasonable. <strong>Gross spread is 7.3%</strong>, an interesting level considering that the offer will likely be successful and Mediaset España delisted in less than 6 months.</li>
</ul>



Mediaset SpA (MS IM) intends to launch a takeover bid for Mediaset Espana Comunicacion S (TL5 SM). Consideration is €1.86 + 4.5 MFEA IM (€5.613 based on €0.834/ordinary share A).
12% premium. Conditional on reaching 90% of voting rights (excluding those already controlled by MFE, implies 39.88%). Cash component to be fully funded by target's net cash position.
The offer price seems reasonable. Gross spread is 7.3%, an interesting level considering that the offer will likely be successful and Mediaset España delisted in less than 6 months.


Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

<p>We view weakness in global equity markets over the past week as correcting a significant amount of the excess optimism. We recommend taking advantage of the pullback by adding exposure to our favorite areas - namely Technology. Our overall outlook on global equities (both the MSCI ACWI and ACWI ex-US) remains positive and we continue to expect higher equity prices going forward.  In today’s report we provide a technical appraisal of all major markets and highlight actionable stocks throughout the int’l Technology and Communications sectors.</p>

We view weakness in global equity markets over the past week as correcting a significant amount of the excess optimism. We recommend taking advantage of the pullback by adding exposure to our favorite areas - namely Technology. Our overall outlook on global equities (both the MSCI ACWI and ACWI ex-US) remains positive and we continue to expect higher equity prices going forward.  In today’s report we provide a technical appraisal of all major markets and highlight actionable stocks throughout the int’l Technology and Communications sectors.

Global-Ex-U.S. Equity Strategy: Add Exposure To Technology, Communications

Spain

Mediaset España Comunicación, S.A., a television broadcaster, conducts television, cinema and music production operations.  The Company owns and operates the Spanish television station Telecinco as well as media and advertising companies.

Mediaset España Comunicación, S.A. (TL5 SM)

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Mediaset España Comunicación, S.A. (TL5 SM)

Media for Europe: Catalyst for Tightening of the Discount of A Shares

In the event that the offer for TL5 is accepted by all shareholders, the number of low-voting MFEA would increase relative to high-voting MFEB, and...

Jesus Rodriguez Aguilar

MFE/Mediaset España: Second Time Around

MFE will launch a voluntary takeover bid for the 44.3% of the capital of Mediaset España that it does not control. This time, without the...

Jesus Rodriguez Aguilar

Global-Ex-U.S. Equity Strategy: Add Exposure To Technology, Communications

We view weakness in global equity markets over the past week as correcting a significant amount of the excess optimism. We recommend taking...

Vermilion Research

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