The Council of Ministers has given Vivendi, Prisa’s second-largest stakeholder with a 9.94% holding, permission to convert all of its convertible subordinated debentures, increasing its ownership position in the company’s capital.
The total amount of the issue was €130 million and the first conversion period started on 1 May and will end on the tenth. Vivendi’s conversion of the subscribed bonds will result, in the final scenario of a full conversion by all bondholders, in an increase of its stake in Prisa to 10.9%. This stake would reach a temporary maximum of 15% in the event that Vivendi is the only subscriber to exercise its voluntary conversion right in this first conversion period.
Valuation: positive as it allows Vivendi to strengthen its shareholding in Prisa, confirming its position that its stake in Prisa is strategic and that it seeks to strengthen its position in the education and media markets in both Spain and Latin America.
Vivendi became a shareholder of Prisa in January 2022, after buying the stake held by HSBC. The company initially acquired HSBC’s 7.89% stake, for a total amount of around €52M, at a sale price of €0.93/share (66% above yesterday’s closing price) and, a few days later, increased its stake to 9.936%. Vivendi stated from the outset that its stake in Prisa was “strategic” and that it sought to participate in its strategy and management; Vivendi already has a seat on Prisa’s board of directors and will ask to increase its representation as it increases its stake. To exceed the 10% level, Vivendi needed the express authorisation of the Council of Ministers because the royal decree that was approved during the state of alarm sets at 10% the shareholding that a foreign investor can reach in companies in strategic sectors (among which the media was included).