Sale of M6 aborted: return to an epic soap opera in 7 episodes

M6 ne vaut plus qu'autour de 1,6 milliard d'euros en Bourse.

Posted Oct 4, 2022, 6:00 AM

At the beginning of last week, at a Bertelsmann seminar in Gütersloh, Germany – planned for a long time – bringing together the managers of the various group entities, Thomas Rabe, the boss of the diversified group in the media, was smiling. And nothing filtered on the outcome of the sale of M6, which kept the PAF in suspense for almost two years.

Yet behind the scenes, a real race against time was launched. Since the company headed by Nicolas de Tavernost could not be “married at first sight” – as in a broadcast of the 6 – with TF1, as Bertelsmann hoped, it had to try to find a plan B. The law prohibits, in fact, any assignment of channel for five years, after the renewal of a frequency, which intervenes for M6 next spring, which led to a very tight timing.

It was this timing and the legal uncertainties that finally decided Bertelsmann to abandon the sale. This announcement is the epilogue of a real soap opera that has lasted for almost two years with its suspense, its twists, its “spoilers”…

Episode 1 (end of 2020): setting the scene

In the small middle of the PAF, the first rumors of a sale of the M6 ​​group, which owns the M6 ​​channel, but also 6Ter, Gulli, W9 and RTL radio, among others, are buzzing in autumn-winter 2020. evolution of Bertelsmann’s portfolio during this period, in particular the announcement of the takeover of the American publisher Simon & Schuster, fuels speculation on the fate of the group’s holdings in France. It was also at this time that the German group unveiled the sale of Prisma Media, its magazine branch in France (“Capital”, “Geo”, “Voici”…), to Vivendi. Some even see it as a possible wider “hidden deal” with Vivendi.

On closer inspection, the public remarks of Nicolas de Tavernost, a few months earlier, went in the direction of a rapprochement between French audiovisual groups. In an interview with Les Echos, in February 2020, the boss of the channel begins to distill the idea of ​​alliances: “In the United States, all over the world, a vast movement of consolidation is underway. And those who don’t participate will be marginalized or find themselves in a situation of dependency,” he says.

Episode 2 (early 2021): launching the plot and bringing in the characters

But the soap opera was really launched in January 2021, when Bertelsmann confirmed a potential sale, while the M6 ​​title soared on the stock market on speculation. “The group has reiterated on several occasions the interest there would be in favoring a consolidation of the European audiovisual sector. The RTL group regularly assesses such operations likely to create value for its shareholders,” he said, while recalling that he had no guarantee that such an operation would succeed.

The machine is launched. The contenders for M6 are starting to jostle, to be in the process led by the bank JP Morgan.

Several candidates would then have submitted offers including Vivendi, TF1, Xavier Niel, the Czech Daniel Kretinsky (already owner of media in France, including the emblematic “Elle”) and the Italian Mediaset. RTL Group expected at the time around 1.5 billion euros from the sale of the 48% it holds in M6, i.e. an overall valuation of the group of around 3 billion…

However, today, with the fall in the prices of media companies, on fears linked to the macroeconomic context which could weaken the advertising market, M6 is only worth 1.6 billion euros on the stock market.

Episode 3 (spring-summer 2021): tightening the action on the “heroes” by raising the tension

On May 17, 2021, Bertelsmann announces exclusive discussions with Bouygues. The “dream” of creating a French audiovisual champion – to use the term of Gilles Pélisson, the CEO of TF1 – was born. A giant with 3.4 billion euros in turnover and a combined current operating profit of 461 million (based on figures at the time). Nicolas de Tavernost, the boss of the group over which Bouygues must have control, is propelled as the planned leader of the new group.

The Stock Exchange applauds the planned marriage between the French number 1 in free-to-air television and its challenger. The stated objective? “To provide a French response to global platforms”, according to a press release from RTL Group at the time (Bertelsmann group). But the two groups already know that the game will be close: they must convince the Competition Authority (ADLC) and hope for a Copernican change in antitrust, taking into account the recent upheavals in the industry with, on the one hand, the rise in power of Google, Facebook and on the other, that of Netflix, Disney+, Amazone Prime Video.

For months, the initiators of the project try to convince of the merits of their marriage. Martin Bouygues, for example, spoke to the Senate about a “sovereignty project”. “If we don’t move, it’s going to end very badly,” he threatened, recalling that Netflix had a capitalization 100 times greater than that of TF1.

For months, the leaders of TF1 and M6 repeated their arguments on the “necessity” of this merger. For months, the opponents, opposite, are mobilizing.

The soap opera was quite hectic during this period. At first, the affair seemed to be a foregone conclusion with rather favorable remarks from the public authorities, and the non-opposition of the Elysée. At this point, “dinner is almost perfect”. But things got tough last spring, when the two parties intensified discussions with the Competition Authority. The two groups then really realize that it will take “incredible talent” to succeed in the operation.

Episode 4 (summer 2022): create a big twist

It is around mid-July that the groups receive verbal feedback from the ADLC instruction services. “It’s really there, that we thought it would be complicated,” says a relative. Then, at the end of July, the main conclusions of the investigation report are revealed to the market. During the presentation of the results to the analysts, Nicolas de Tavernost made the suspense last until the end of the meeting before revealing that this report was not favourable.

During the following weeks, the TF1 and M6 teams struggled to try to find solutions, proposing remedies for the ADLC. Even if a report from the DGCRRF (Directorate General for Competition, Consumer Affairs and Fraud Prevention) is favourable, at that time there does not seem to be any question of a boost from the public authorities. “The government is terrorized by a media controversy. And he only has shots to take. If he intervenes in favor of the operation, we will say that Emmanuel Macron is meddling in Bouygues’ affairs and if he shows signs against, some will say that he favors other media bosses like Xavier Niel ” , notes a good connoisseur of the sector.

At the beginning of September, the two groups played their all out during the auditions in front of the College of the ADLC. At the Maison du Barreau, in the center of Paris, Martin Bouygues as well as Thomas Rabe travel in person and the latter gives his presentation in French. “There was dead silence in the room,” said someone close to the case. A few days before, in a interview with the Financial Times , Thomas Rabe warned of “the profound impact” on the entire European television sector if the agreement were to be blocked. “If the French authorities decide to oppose this merger, it is a lost opportunity, not only for this year, but also for the long term”, he said then.

But, the leaders will not have succeeded in convincing. A few days later, the ax falls: while the ADLC asks for the transfer “at least of TF1 or M6” and the two groups abandon their marriage project.

The press release’s ink is barely dry when the phones of Nicolas de Tavernost and Thomas Rabe are already ringing. Fallen first-round contenders are back in the running.

Episode 5 (fall 2022): bringing back key characters from season 1

“Who wants to be my partner? “. Never has an M6 program been so in tune with current events. As soon as the project with TF1 was abandoned, Bertelsmann was looking for other partners.

Relatives of Nicolas de Tavernost assure that he did not play a double game by keeping close contact with other potential buyers, but he must then act quickly to find a plan B. For a few days, a race against time is launched: to have an M6 frequency renewal file ready at the end of the year/beginning of next year, the buyer must be known as soon as possible.

In this season 2 of the M6 ​​sale soap opera, characters from “season 1” – or more precisely from May 2021 – have also resurfaced, Xavier Niel and Daniel Kretinsky in the lead.

Episode 6 (autumn 2022): making the suspense last

Then a new big twist appeared. Xavier Niel, individual shareholder of Le Monde and owner of the Iliad telecoms group, has joined forces with the Italian television group Media For Europe (which includes Mediaset entities and is listed in Amsterdam) of the Berlusconi family. A “duo” that worries internally. “Berlusconi, the man who missed the launch of La Cinq more than thirty years ago! you imagine ! “choked an M6 executive a few days ago.

Facing him, a team made up of personalities from very different sectors: Stéphane Courbit, behind the production giant Banijay, which he has just floated on the stock market, associated with the Marseilles Rodolphe Saadé, boss of the shipowner CMA-CGM, and to Marc Ladreit de Lacharrière, at the head of Fimalac which owns Webedia (Allociné, 750 g, production companies like Elephant etc.). The first was the majority in the offer according to our information.

If Stéphane Courbit is well known to the PAF, the appearance on the scene of Rodolphe Saadé who recently made himself known in the world of the media, by getting his hands on the regional daily “La Provence”, also coveted by Xavier Niel, may seem surprising. But, “in M6, I will be neither pilot nor co-pilot, but rather in the passenger seat”, he recently confided to one of his relatives.

Faced with two associations, the Czech billionaire Daniel Kretinsky, already a candidate last year, would also have returned to the race with the advantage of having little presence in the media in France (through media such as “Elle”, ” Marianne” etc.).

Episode 7: the unexpected epilogue

October 3, 2022: Bertelsmann has finally chosen not to sell. In a press release, the German group specifies that given the legal risks and uncertainties, it has decided not to sell and to keep its controlling stake in M6.

According to our information, it was the offer of Stéphane Courbit with Rodolphe Saadé and Marc Ladreit de Lacharrière which would have been the closest to succeed. But uncertainties and the possibility of failure complicated its financing.

The band was up against a tight schedule. Next May the chain run by Nicolas de Tavernost will have to ask for the renewal of its license, which it will obtain in all likelihood. But this means that it will not be transferable for five years, or 2028, in accordance with the law. According to our information, Arcom would have been forced to launch calls for applications for the M6 ​​frequency on December 15 at the latest, with submission of formal applications in mid-January.

However, before the submission of these applications for the DTT frequency of 6, two green lights had to intervene. Arcom first had to examine and approve the new owner (which involves hearings, a specific impact study, etc.). But Arcom itself could only issue its approval decision after an antitrust decision, which would also have taken time.

“Too fair” a priori. It seems that the German group, but also the buyers, were hesitant with regard to the schedule. In fact, Bertelsmann is therefore forced to keep M6 for five years unless the law changes.

A new soap opera is opening up, however: will there be other contenders for the M6 ​​frequency?


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