French TV stocks slide after merger to challenge Netflix collapses

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) – The collapse of a deal to set up a French TV giant to challenge US streaming services like Netflix (NFLX.O) has hurt shares in M6 Group (MMTP.PA ) and TF1 (TFFP.PA) affected ) on Monday.

France’s two largest private broadcasters abandoned their merger plan on Friday, citing French antitrust rules that made the deal unworkable.

Like other local broadcasters in Europe, M6 and TF1 are struggling to remain competitive as global video platforms increase their dominance in the industry and a merger was seen as the answer to these challenges. Continue reading

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

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At 1424 GMT, TF1 shares were down 3.3% and M6 shares were down 3%.

The collapse in the talks came as Netflix and rival Disney+ prepared to launch an ad-supported subscription offering for their viewers that could potentially erode TF1 and M6’s ad market share, noted Kepler Cheuvreux analyst Conor O’Shea.

O’Shea added that German media conglomerate Bertelsmann (BTGGg.F) must find a buyer for the 48.3 percent stake in M6 it holds through its RTL division by early next year as the renewal of the broadcast channel license of M6 to a five-year one-year sales ban.

“They need to find a buyer that raises fewer competition concerns,” said a Paris-based competition attorney, noting that the terms of a new deal would likely be less favorable to the German group given the time constraints.

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Bertelsmann said on Friday that the “creation of national media champions in competition with the global platforms” is still part of its strategy, which it “strongly adheres to”. RTL said on Monday it would meet with M6’s leadership team and review its options.

Bertelsmann shares lost 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 advertising, people are very worried about next year,” said a merger arbitrage analyst.

The pressure also increased on TF1.

“One thing is for sure, abandoning this M&A operation is a bad thing for TF1 which, should M6 be sold to a competitor, would face increased competition,” said Stephane Ekolo, Global Equity Strategist at Tradition in London.

The M6-TF1 deal has met strong opposition from French media group Vivendi (VIV.PA), which itself is now being named as a potential buyer, along with Altice, owned by billionaire Patrick Drahi, should Bertelsmann go ahead with its plans to sell its majority stake in M6 .

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Market observers also see the Italian media group MediaForEurope, which is calling for cross-border deals instead of national consolidation to tackle the problems of the European TV industry, as a potential candidate for a deal.

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

MFE shares rose over 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; Writing by Tassilo Hummel, editing by Sudip Kar-Gupta, Jason Neely and Susan Fenton

Our standards: The Thomson Reuters Trust Principles.

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