Prof. Roberto TASCA - RCS MediaGroup
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
UPDATE DOCUMENT – RCS MediaGroup S.p.A.
Addendum to the Fairness Opinion issued
by the
Board of Directors of
RCS MediaGroup S.p.A.
on 24 June 2016
relating to the
INCREASE OF THE OFFER PRICE
OF THE TOTAL VOLUNTARY PUBLIC EXCHANGE OFFER
for the common shares of
bidder
Prof. Roberto TASCA Pagina 1
[ROME 295812_1]UPDATE DOCUMENT – RCS MediaGroup S.p.A.
Milan, 24 June 2016
The Board of Directors
RCS MediaGroup S.p.A.
Via Angelo Rizzoli 8
20132 Milan
SUBJECT:
Addendum to the Fairness Opinion issued on 9 June 2016 concerning the increase of the
consideration offered for the Total Voluntary Public Exchange Offer for 521,864,957 common shares
of RCS MediaGroup S.p.A., promoted by Cairo Communication S.p.A by a notice pursuant to Articles
102 and 106, paragraph 4 of Legislative Decree no. 58 of 24 February 1998 and Article 37 of the
Consob Regulation approved by Resolution 11971 of 14 May 1999.
Introduction
Given that:
1) on 8 April 2016, Cairo Communication S.p.A. (“Cairo” or the “Bidder”) launched
a voluntary public exchange offer (the “Offer” or “OPSC” [Offerta Pubblica Di
Scambio] - Public Tender Offer to Exchange) concerning all the common shares
in RCS MediaGroup S.p.A. (“RCS” or the “Issuer” or the “Company”), equal to
No. 521,864,957 shares, for consideration (the “Consideration”) equal to No.
0.12 common shares of Cairo for each common share of RCS;
2) on 16 May 2016, International Media Holding S.p.A. (“IMH” or the “Second
Bidder”) launched a voluntary public tender offer (“PTO”) concerning No.
403,937,789 common shares of the Company for consideration of EUR 0.70 for
each common share of RCS ( “Competing Offer”);
Prof. Roberto TASCA Pagina 2
[ROME 295812_1]UPDATE DOCUMENT – RCS MediaGroup S.p.A.
3) on 17 June 2016, Cairo issued a higher bid than the Competing Offer, raising
the exchange ratio (“Increased Bid”) to No. 0.16 common shares of Cairo for
each common share of RCS;
4) at the same time as the increased bid, Cairo approved a 2017-2018 Business
Plan on a stand-alone basis, disclosing certain brief data to the market
regarding the economic values of Sales, EBITDA and Capex;
5) on 22 June 2016 Consob authorized Cairo, with the resolution No. 19645, to
issue the Supplement to the Offer Document (“Cairo Supplement”).
the RCS Board of Directors has requested the undersigned Prof. Roberto Tasca to
prepare an update (“Update Document” or “Addendum”) of the opinion expressed
on 9 June 2016, including on the basis of the new information provided to the
market.
The Update Document provides support for the independent Directors and the Board
of Directors of RCS in assessing the fairness of the Increased Bid. The details of the
Increased Bid for which the preparation of this Addendum has been requested are as
follows:
• Issuer: Rizzoli Corriere della Sera MediaGroup S.p.A., with registered office in
Via Angelo Rizzoli 8, Milan.
• Bidder: Cairo Communication S.p.A. – with registered office in Via Tucidide 56,
20134 Milan, is the parent company of a group founded by Urbano Cairo.
• Subject: common shares of RCS, amounting to No. 521,864,957 1, listed on the
MTA (Mercato Telematico Azionario) organized and managed by Borsa Italiana
S.p.A., representing 100% of the share capital of RCS.
• The Increased Bid is equal to No. 0.16 (zero point sixteen) common shares of
Cairo for each common share of RCS tendered to the OPSC.
1
Please note that the Company holds No. 4,575,114 treasury shares.
Prof. Roberto TASCA Pagina 3
[ROME 295812_1]UPDATE DOCUMENT – RCS MediaGroup S.p.A.
• The tender period runs from 20 June 2016 to 15 July 2016.
• As specified in the Notice of the increased bid dated 17 June 2016, based on
the official price of the RCS shares and that of the shares of Cairo
Communication recorded on 7 April 2016, the day before the announcement
of the First Offer, the Consideration reflects a valuation equal to EUR 0.702 for
each share of RCS tendered to the Offer. That same Consideration Price
reflects, on the basis of the official price of the shares of Cairo and that of the
shares of RCS recorded on 17 June 2016, a valuation of € 0.672 for each share
of RCS tendered to the Offer. In the event the Offer is fully subscribed, Cairo
will issue No. 83,498,393 new shares, corresponding to the shares of RCS
tendered to the Offer.
Prof. Roberto TASCA Pagina 4
[ROME 295812_1]UPDATE DOCUMENT – RCS MediaGroup S.p.A.
Assignment’s execution
The document considers two crucial profiles that emerged from the Supplement to
the Offer Document dated 22 June 2016. Firstly, the criteria previously used to draft
the Fairness Opinion prepared by the undersigned on 9 June 2016 in relation to the
weighted average prices calculated based on historic stock market listings in the
period between 8 April 2015 and 7 April 2016 are confirmed in the context of
Paragraph A.1.6 (“Evaluation criteria underlying the calculation of the
Consideration”). Secondly, Cairo has submitted a “Company Overview and 2017-2018
Business Plan” that identifies, in summary or graphic form, certain economic figures
of significance to an estimate of the fundamental value of the Bidder. For these
reasons, the previous range of fairness values, which was exclusively based on criteria
deriving from prices, premiums and historical forecasts, requires us to reconsider.
Today, the Expert has new information, which is brief but prospective for Cairo. That
cannot be ignored in the context of a fairness report to be sent to all RCS’s
shareholders.
To this end, the document is divided into three parts.
The first includes
- the quantifications calculated in the Fairness Opinion issued by the
undersigned on 9 June 2016, which were made with reference to 7 April
2016, the day before the announcement of the First Offer;
- the exchange ratios deriving from the measurements carried out with
reference to the weighted average prices (WAP), to the premiums and
discounts for a sample of the PTOs and the target prices of the analysts
expressed up to the said date.
Prof. Roberto TASCA Pagina 5
[ROME 295812_1]UPDATE DOCUMENT – RCS MediaGroup S.p.A.
In the second part, which is the innovative profile of the evaluation process on which
the Expert can express his fairness opinion, it was intended to compare the
fundamental value of RCS, calculated on the basis of the DCF model, with an estimate
of the fundamental value of Cairo, conducted on the basis of the market multiples
method and the dimensions of the Sales and EBITDA reported by it in the document
entitled “Company Overview and 2017 - 2018 Business Plan.” As will be highlighted,
the multiples used for this valuation are aligned with those used by Cairo 2 to carry
out its own comparative analysis of RCS.
Finally, a third part, in which the Expert intends to summarize his conclusions for the
purpose of a revaluation of its fairness opinion, in the light of indications taken from
the historic prices, confirming what has already emerged in the Fairness Opinion of 9
June 2016, and new estimates are produced made on the basis of the multiples
method applied to the values made available by Cairo with the “Company Overview
and 2017 - 2018 Business Plan.”
It was deemed that the new, although synthetic, information disclosed by Cairo to
the market on 22 June 2016, could only partially fix the critical issues identified in the
Fairness Opinion in relation to the indeterminacy of a fundamental value for Cairo.
However, this last aspect of the task assigned to Expert has been considered
important in drawing up a fairness opinion. Certainly the estimation of the
fundamental value reached with the multiples method does not rectify the critical
issues already mentioned in the Fairness Opinion, but the exclusion of the new
wealth of information by the fairness opinion would, in the opinion of the Expert,
result in a limitation to the documented knowledge which he is required to transfer
to the RCS Board of Directors and, therefrom, to the market.
Cautiously, it should be underlined that an estimate of the fundamental value of
Cairo common shares has been made instead of an accurate assessment of it by
2
Cf. page 66 of the Cairo Supplement
Prof. Roberto TASCA Pagina 6
[ROME 295812_1]UPDATE DOCUMENT – RCS MediaGroup S.p.A. means of the DCF method. The impossibility of performing an assessment of Cairo with the said method remains a significant issue of the evaluation process. Prof. Roberto TASCA Pagina 7 [ROME 295812_1]
UPDATE DOCUMENT – RCS MediaGroup S.p.A.
Part 1
The first part references the assessments already expressed in the Fairness Opinion
of 9 June 2016:
1) on the basis of the historic series of the weighted average prices (WAP) between
the 8 April 2015 and 7 April 2016 (identified as “Historical series of weighted
average market prices for pre-announcement volumes traded”), calculated on
the basis of the stock market price, has been determined the implicit exchange
ratio over the time frame of 12, 6, 3, 1 month and 1 day between the common
share of RCS and the common share of Cairo 3. For liquidity reasons and for the
sake of concurrence between the underlying quotations, a 6-month – 3-month
range has been selected as reference for the valuation.
2) The outcome of point 1 was then compared with a sample of the voluntary PTO
launched from January 2010 to February 2016, based on the “pre-
announcement” prices. This comparison has made it possible to determine the
exchange ratio of the OPSC as if the mean and median premiums/discounts of the
voluntary PTO in question were applied to the results achieved in relation to
point 1.
3) Finally, an analysis of the target prices reported by Bloomberg in blind version on
the basis of the indications provided by the analysts covering the securities
subject to the OPSC for the period 8 April 2015 - 7 April 2016, determining the
implicit exchange ratio in comparison between the minimum prices and the
maximum prices of the two securities, was performed.
The analysis of the WAP in the specified period has led to the following
quantifications:
3
The historic series of official prices have been adjusted to take into account the dividend paid of 0.20 at the ex-
dividend date of 9 May 2016.
Prof. Roberto TASCA Pagina 8
[ROME 295812_1]UPDATE DOCUMENT – RCS MediaGroup S.p.A.
1 - Exchange relations with WAP April 2015-April 2016
Period WAP RCS WAP Cairo CUM Ex div. exchange
12 months 0.76 4.64 0.17
6 months 0.59 4.30 0.14
3 months 0.55 4.17 0.14
1 month 0.49 4.52 0.11
1 day 0.42 4.59 0.09
The analysis of the WAP and the subsequent comparison with the sample of PTOs led
to the following quantifications:
2 - Exchange relations with premiums pre-announcement
Period Average premiums with WAP RCS WAP Cairo CUM Ex div. exchange
pre-announcement
prices
12 months 40% 0.76 4.64 0.24
6 months 40% 0.59 4.30 0.20
3 months 35% 0.55 4.17 0.19
1 month 36% 0.49 4.52 0.15
1 day 16% 0.42 4.59 0.11
The analysis of the target prices provided by Bloomberg has led to the following
quantifications:
3 – Exchange ratios with analysts’ consensus
Period Average exchange Max. exchange Min. exchange
relations ex relations ex relations ex
12 MONTHS 0.20 0.23 0.16
6 MONTHS 0.17 0.20 0.16
3 MONTHS 0.15 0.15 0.15
1 MONTH 0.16 0.16 0.16
1 DAY 0.16 0.16 0.16
Prof. Roberto TASCA Pagina 9
[ROME 295812_1]UPDATE DOCUMENT – RCS MediaGroup S.p.A. Part 2 This second part represents the innovative profile of the evaluation process adopted in the comparisons of Cairo OPSC. The extension of the measurements on which to base the fairness opinion is, for the Expert, a crucial need, in relation to the fact that on 17 June 2016 Cairo has released to the market the “Company Overview and 2017 - 2018 Business Plan,” from which some perspective economic figures can be deduced on which it is possible to base an estimate of the fundamental value of the Bidder. As widely explained in the Fairness Opinion about the consideration offered in the OPSC, the determination of the fair exchange ratio, it should be made on the basis of the fundamental values of the securities to be exchanged. The definition of the fundamental values is derived from the construction of the future cash flows, defined on the basis of multi-year plans approved by the administrative bodies of the companies whose securities are traded and on their comparative evaluation. Although the fundamental value can be determined with different methods, the calculation process that is most frequently used in theory and in the settled professional practice is the “Discounted Cash Flow” method or “DCF.” As regards RCS, it has presented the 2016-2018 Business Plan to the market on the date of 21 December 2015; this plan has allowed the assessment of a DCF thanks to the income statement and balance sheet included in the document and thanks to talks that have taken place with members of the company. In relation to Cairo, however, a document was presented, the Company Overview and 2017 - 2018 Business Plan, on the date of 17 June 2016. This document does not include the income statement or the balance sheet, but rather a few figures: Sales 2017 – 2018, Ebitda 2017 – 2018 and Capital expenditure 2017 – 2018 from which it is possible to draw some numerical indications on the figures themselves. Prof. Roberto TASCA Pagina 10 [ROME 295812_1]
UPDATE DOCUMENT – RCS MediaGroup S.p.A. The lack of availability of some of the fundamental data of Cairo has made it impossible to apply the DCF method in determining the fundamental value of its shares. The undersigned has therefore deemed it appropriate to empirically estimate the unit value of the Cairo shares, using the market multiples method. Although this method is often used for the purposes of control, in this case it constitutes an essential complement to the other methods used to verify the fairness of the exchange ratio between the shares of Cairo and the shares of RCS, because it is the only one capable of expressing perspective values that relate to the results of the DCF applied per RCS. Since in this case the evalutation depends on the selection of the sample and the correspondence of the multiples to concrete markets comparisons, on the verified assumption that Cairo is active in publishing newspapers and books (which represents approximately 80% of the Ebitda of the company) and in the television industry, two clusters of comparable companies were selected. The first is the one used to define the mean multiples of RCS in the comparison of the values obtained with the DCF, replacing Cairo with RCS between them. The second originates from the construction of a weighted average multiple of comparable companies of the Publishing and Broadcasting sectors. The weighting criteria has been defined on the basis of the composition of the EBITDA Cairo in the first quarter of 2016 (80% Publishing - 20% Broadcasting). The said weighting is certainly cautious for the purpose of the estimation as it classifies as Broadcasting all the activites of Cairo complementary to the Publishing sector, but the aim of the evaluation allow for this caution.The source of the data is the same used in the Fairness Opinion released to date by the undersigned. Shown below are the details: Prof. Roberto TASCA Pagina 11 [ROME 295812_1]
UPDATE DOCUMENT – RCS MediaGroup S.p.A.
EV/SALES EV/EBITDA
Publishing Basket 31/12/16 31/12/17 31/12/18 31/12/16 31/12/17 31/12/18
Arnaldo Mondadori Editore S.p.A. 0.37x 0.36x 0.36x 5.23x 4.64x 4.49x
Il Sole 24 Ore S.p.A. 0.27x 0.26x 0.26x 11.35x 8.26x 6.99x
Gruppo Editoriale L’Espresso S.p.A. 0.64x 0.64x 0.65x 6.39x 6.09x 5.36x
Vocento S.A. 0.57x 0.57x 0.57x 6.15x 5.03x 4.66x
RCS MediaGroup S.p.A. 0.84x 0.83x 0.82x 9.17x 8.20x 6.79x
Promotiora de Informaciones SA 1.64x 1.60x 1.55x 8.07x 7.38x 6.92x
AVERAGE 0.72x 0.71x 0.70x 7.73x 6.60x 5.87x
Pondered weight on 1st Q 2016 data from 80.0% 80.0% 80.0% 80.0% 80.0% 80.0%
Publishing
Broadcasting Basket 31/12/16 31/12/17 31/12/18 31/12/16 31/12/17 31/12/18
Mediaset S.p.A. 1.75x 1.69x 1.64x 10.15x 8.78x 7.25x
Television Francaise 1 SA 0.74x 0.72x 0.70x 8.11x 6.47x 6.75x
ProSiebenSat.1 Media SE 2.95x 2.73x 2.51x 10.84x 10.07x 9.47x
Metropole Television SA 1.40x 1.38x 1.37x 5.94x 5.36x 5.22x
Atresmedia de Medios de Comunicacion SA 2.39x 2.29x 2.20x 11.75x 10.97x 9.60x
ITV plc 2.69x 2.59x 2.51x 8.98x 8.47x 8.04x
Modern Times Group AB 1.02x 0.96x 0.90x 10.76x 9.76x 9.14x
AVERAGE 1.85x 1.77x 1.69x 9.50x 8.55x 7.92x
Pondered weight on 1st Q 2016 data NOT from 20.0% 20.0% 20.0% 20.0% 20.0% 20.0%
Publishing
0.95x 0.92x 0.90x 8.08x 6.99x 6.28x
MULTIPLE WEIGHTED AVERAGES
The Data provided by Cairo (Sales, EBITDA and capital expenditures), together with
the presented multiples, have led to the quantification of the estimate of Cairo’s
fundamental values. The only adjustment intervention was made to the accounting
method for the television rights in relation to the capital expenditures highlighted,
included in the net costs for the reduction of the Ebitda indicated in the Plan, to align
the value to those within the companies included in the considered clusters. It is
relevant, to this extent, that the Ebitda values underlying the evaluation are by any
rate aligned on average with the consensus.
CAIRO VALUATION 2017E 2018E
Sales 263.0 289.0
Enterprise value with Publishing multiple
Enterprise value with multiple weighted average
EBITDA 33.0 46.0
Adjustment for investments in TV rights by BP 2017-2018 3.8 8.4
ADJUSTED EBITDA 29.2 37.6
Enterprise value with AVERAGE multiple 192.7 220.9
Enterprise value with multiple weighted average 225.7 272.5
Prof. Roberto TASCA Pagina 12
[ROME 295812_1]UPDATE DOCUMENT – RCS MediaGroup S.p.A.
From the Enterprise value, adjusting these values for the net financial position (1Q
2016), the benefits for the employees (31/12/2015), the deferred tax assets and
minority interests (both 31/12/2015), it was possible to reach the Cairo share values.
Detailed below are the results:
Cairo share value with EV/Sales 2017 Cairo share value with EV/Ebitda 2017
Valore Cairo con multiplo Ebitda 2017 Publish MMP
Cairo value with 2017 Sales multiple Publish MMP EV actualized with 2017 Ebitda multiple 192,7 225,7
EV actualized with 2017 Sales multiple 186,8 242,3 Net financial position (cash) 108,6 108,6
Net financial position (cash) 108,6 108,6 Employee benefits (13,3) (13,3)
Net deferred tax assets 2015 att. 4,2 4,2
Employee benefits (13,3) (13,3) Minorities (0,1) (0,1)
Net deferred tax assets 2015 att. 4,2 4,2 Equity Value 292,1 325,1
Minorities (0,1) (0,1) No. of net shares 78,3 78,3
Equity Value 286,2 341,7 Cairo’s Value per share 3,73 4,15
No. of net shares 78,3 78,3
Cairo’s Value per share 3,65 4,36
Cairo share value with EV/Sales 2018 Cairo share value with EV/Ebitda 2018
Cairo’s Value per share
Valore Cairo con multiplo Sales 2018 Publish MMP Valore Cairo con multiplo Ebitda 2018 Publish MMP
EV actualized with 2018 Sales multiple 202,3 259,6 EV actualized with 2018 Ebitda multiple 220,9 272,5
Net financial position (cash) 108,6 108,6 Net financial position (cash) 108,6 108,6
Employee benefits (13,3) (13,3) Employee benefits (13,3) (13,3)
Net deferred tax assets 2015 att. 4,2 4,2 Net deferred tax assets 2015 att. 4,2 4,2
Minorities (0,1) (0,1) Minorities (0,1) (0,1)
Equity Value 301,7 359,0 Equity Value 320,3 371,8
No. of net shares 78,3 78,3 No. of net shares 78,3 78,3
Valore per azione Cairo
Cairo’s Value per share 3,85 4,58 4,09 4,75
On the basis of these results, it was possible to reach 4 different ranges of exchange
ratios, against the value of the RCS shares, determined by means of the DCF and in a
range between 0.80 and 1.13 with an intermediate value of 0.95:
1) exchange ratios from Publishing EV/Sales multiples 2017 and 2018,
2) exchange ratios from Publishing EV/Ebitda multiples 2017 and 2018,
3) exchange ratios from Publishing EV/Sales weighted average multiples 2017 and
2018,
Prof. Roberto TASCA Pagina 13
[ROME 295812_1]UPDATE DOCUMENT – RCS MediaGroup S.p.A.
4) exchange ratios from Publishing EV/Ebitda weighted average multiples 2017
and 2018.
As further confirmation of the quality of the estimate of Cairo’s fundamental values
to which we arrived, we show the relationship existing between:
i. the multiples of the two clusters used in the Cairo evaluation;
ii. those indicated in the Cairo Supplement4;
iii. those implicit in the interval in the fundamental values expressed for the
RCS securities using the DCF method.
It is therefore immediately possible to see that there is a high correlation level
between the multiples, which attests to the significance of the values estimated for
Cairo.
4
Cf. page 66.
Prof. Roberto TASCA Pagina 14
[ROME 295812_1]UPDATE DOCUMENT – RCS MediaGroup S.p.A. Conclusions The Fairness Opinion expressed on the date of 9 June 2016 was requested to the Expert following the Communication of 17 June 2016 and the Cairo Supplement of 22 June 2016, with which the Offeror has increased the consideration offered to the market compared to the provisions of the Offer Document of 28 May 2016, increasing the consideration from 0.12 to 0.16. In addition to communicating the bid increase to the market, on the same date some relevant figures which related to the 2017-2018 Business Plan, approved by the Board of directors on the same day were disclosed to the market: Sales, EBITDA and Capex for the two-year period. This made it impossible to objectively remove the majority of the issues already flagged up in the Fairness Opinion, or the fact that it is not possible to apply the DCF model in the determination of the unit value of the common shares of Cairo, however it has allowed the Expert to make an inference by means of the application of the market multiples methodology to the economic figures indicated and the overcoming of the valuation limits attributable to the use of only the historical series of the market prices. Since prospective information are available, the previous range of fairness values indicated in the Fairness Opinion of 9 June 2016, which was solely based on criteria derived from prices, premiums and historical forecasts, a reconsideration was necessary. The Expert has now new information, concise but with a prospective value for Cairo, which cannot be disregared for the purposes of a fairness opinion for RCS shareholders. Therefore, the use of the methodology of the multiples for determining a range of values was declined according to two different clusters of comparable companies and in a case weighted according to the mix of Ebitda detected for Cairo in 1Q 2016. The application of the multiples method has made it possible to define a range of Prof. Roberto TASCA Pagina 15 [ROME 295812_1]
UPDATE DOCUMENT – RCS MediaGroup S.p.A.
minimum, average and maximum values for the Cairo share, which have been
compared with the equivalent values of RCS, determined using the DCF method,
defining the exchange ratios.
At the end of the path set out, the ranges of fairness determined on the basis of all
observations can be summarised.
Summary of the results
Concambi
Exchangescon
withMultipli
EBITDA Ebitda '17-'18
Multiples MediWeighted
’17-’18 Ponderati 0,19 0,24
Concambi conwith
Exchanges Multipli
SalesSales '17-'18
Multiples MediWeighted
’17-’18 Ponderati 0,18 0,25
Averages
Concambi con Multipli Ebitda '17-'18 Publishing 0,21 0,28
Exchanges with EBITDA Multiples ’17-’18 Publishing
Concambi con Multipli Sales '17-'18 Publishing 0,22 0,29
Exchanges with Sales Multiples ’17-’18 Publishing
Consensus 0,15 0,20
Consensus
PMP OPA 0,19 0,20
WAP PTO
PMP 0,14 0,14
WAP
0,12 0,14 0,16 0,18 0,20 0,22 0,24 0,26 0,28 0,30
Riquadro delle medie dei minimi
Table of the average of the minimums
(0,19) e dei massimi (0,23)
(0.19) and of the maximums (0.23)
It is evident from the examination of the summaries of the results that the only case
in which the exchange ratio of 0.16 offered by Cairo in the Increased Bid appears to
be fair, in light of the new set of information made available, can be attributed to the
WAP method of the historical series of the stock market quotations considered on
the 3-6 month time frame. It is therefore important for the Expert, in the formation
of the measures on which it is to base his fairness opinion, the additional set made
available by Cairo with the publication of the “Company Overview and Business Plan
2017-2018,” in which it is indicated, in summary or graphic form, some important
Prof. Roberto TASCA Pagina 16
[ROME 295812_1]UPDATE DOCUMENT – RCS MediaGroup S.p.A. economic variables. This document does not allow for a precise application of a DCF model, because it lacks an analytical grade of indispensable detail for the determination of the fundamental value of the Bidder. However, it makes it possible to make an estimate of that value on the basis of multiples of the market and some of the necessary balance sheet in the Financial Statements as of December 2015 and in the Interim Management Report as of 31 March 2016, in order to compare this value with what is determined based on the DCF method for the RCS by the undersigned. In the case of the exchange ratios determined on the basis of the premiums of the PTOs on a sample of similar transactions completed up to February 2016 on the Italian market, of the target prices of the analysts, both of which were expressed in the previous Fairness Opinon, and in the application of the multiples of comparable companies, a situation of total incongruity of the values offered clearly occurs. Although the undersigned deems most relevant the methods based on the prospective information as compared with those that use historical information, because the former permit an approximation of the fundamental value of the securities of the Bidder and the Issuer, it has been decided to summarize the final indication by means of a simple arithmetic average of the different ranges determined, as already done in the Fairness opinion issued on 9 June 2016 and in order to maintain the opinion free of elements of subjectivity. From this it is possible to derive a fairness range between 0.19 and 0.23, which implies an assessment of NON-FAIRNESS of the consideration of 0.16 offered by Cairo in its bid increase.5 5 In support of the conclusion, significant evidence is invoked. On 21 June 2016, Equita Sim has published a research regarding the transaction. It arrives at an evaluation of Cairo on a stand-alone basis and before considering any synergy arising from any positive conclusion of the OPSC, an intermediate value of € 5, with a Wacc of 6% and a g of 1%. Dividing the intermediate value of RCS obtained by the undersigned with the DCF method, equal to EUR 0.95 by Prof. Roberto TASCA Pagina 17 [ROME 295812_1]
UPDATE DOCUMENT – RCS MediaGroup S.p.A.
Milan, 24 June 2016
In witness whereof
Prof. Roberto Tasca
the value of EUR 5, reaching an exchange ratio of 0.19. An value that is exactly aligned in relation to the range reached
by the undersigned as an average of the different evaluations made.
Prof. Roberto TASCA Pagina 18
[ROME 295812_1]You can also read
