Bertelsmann has canceled the auction of its French TV channel M6, despite receiving several “attractive” bids backed by billionaires after regulatory requirements left too narrow a window for the sale to be completed.
The decision by Europe’s largest media group to abandon the sale is another setback for CEO Thomas Rabe after his initial decision to sell M6 to larger French broadcaster TF1 was thwarted by opposition from competition authorities.
Rabe’s backup plan was a rapid-fire auction that started last week. But an obstacle soon emerged – M6’s broadcast license is up for renewal next year, which would require any sale to be completed before the January registration date.
Rabe said that given the uncertainties, it was right that Bertelsmann’s RTL kept its stake in M6, which continued to be profitable. “We tested the market and received attractive offers, but the schedule is too tight due to the license renewal process and the legal risks are therefore too high,” he said.
Recent bidders for M6 included Czech investor Daniel Křetínský; a joint bid by telecoms billionaire Xavier Niel and Silvio Berlusconi-backed conglomerate MediaForEurope. A consortium of French entrepreneurs including maritime magnate Rodolphe Saadé, FL Entertainment’s Stéphane Courbit and investor Marc Ladreit de Lacharrière also bid.
Bertelsmann chose to abandon the process because it could not clarify how a new buyer would renew the M6 license before it expires in May. Under French regulations, the main shareholder would have to submit a formal application by January, which would be too tight a timeline for the company sale to be completed.
Initial bids were around €20 per share, which would have valued Bertelsmann’s 48.3 percent stake in M6 at around €1 billion to €1.2 billion. Some of the bidders had urged the seller to protect them from the risks involved in the license renewal process.
Rabe was in Paris on Friday to meet with regulators and officials at the Élysée Palace to see if they would change the schedule or introduce some flexibility in the license renewal process, but he was turned away, a person familiar with the matter said .
Rabe’s strategy has long been to build “national media champions” big enough to hold their own against global streaming services like Netflix and Disney. However, it is unclear how this could be achieved without regulators dropping objections to mergers between the largest national broadcasters.
“We have been and will remain a loyal shareholder of M6 for 35 years. We will look at ways to build a media group large enough to compete with US platforms,” Rabe added. “M6 is very well managed, has achieved record results over the past year and has proven to have significant strategic value.”
https://www.ft.com/content/624fea91-0c36-43b8-bb24-f5c40c44e597 Bertelsmann ends auction of French broadcaster M6