Cofina and Prisa, the Spanish owner of Media Capital, are in dispute over the former's withdrawal of its bid.
Portugal’s Securities Markets Commission (CMVM) has rejected an application filed by media company Cofina, the owner of Correio da Manhã, in which it sought the termination of its offer for a company that controls Media Capital, owner of broadcaster TVI, on the grounds that one of the conditions of the deal was not met.
Cofina and Prisa, the Spanish owner of Media Capital, are in dispute over the former’s withdrawal of its bid.
In a statement posted on its website on Monday, the CMVM recalled that “on March 24 2020 Cofina filed a request for the CMVM to consider the procedure of the offer extinct, due to the impossibility of definitively verifying one of the conditions on which its launch depended, [or] alternatively, the revocation of such offer, due to changed circumstances.”
However, the regulator said, it does not take the same view of the process, which failed after a Cofina capital increase was not concluded.
“Cofina was notified of the draft decision rejecting the application so that, if it wishes, it may take a decision on it within ten working days, namely by presenting evidence intended to clarify the aspects raised in it and which, in the opinion of this Commission, justify the preliminary conclusion,” reads the CMVM statement.
The commission believes that “all the conditions to which the launching of the referred Public Tender Offer was subject should have been verified – namely due to the preliminary conclusion that Cofina’s conduct contributed decisively to the non-placement of a residual number of shares in the scope of the referred capital increase.”
In addition, the CMVM says, “it is not possible, in view of the informaton and grounds provided by the applicant, to consider that the failure to carry out the purchase transaction of the stake held by Promotora de Informaciones, S.A. [Prisa] arose from the supervening circumstances that may result in the revocation of the Offer on the basis of Article 128 of the Securities Code.”
Cofina’s capital increase – aimed at raising 85 million euros – was intended to finance the purchase of Media Capital. But in March the company said that, given the “deterioration of market conditions” and “the condition of full subscription of the capital increase not having been verified, the offer [for Media Capital] remained ineffective” and that, in other words, “the conditions on which the conclusion of the purchase and sale of Vertix’s (and indirectly Media Capital’s) shares depend are not met.”
The offer included the subscription reserved for shareholders exercising their preemptive rights and other investors who acquired subscription rights, through the issuance of 188,888,889 new common, book-entry and nominative shares.
On March 16, Prisa issued a statement alleging that Cofina had “violated the purchase and sale agreement” for the acquisition of Media Capital and that it had initiated “all measures” against the company in defence of its interests.
In the statement, which was sent to the CMVM, Prisa reiterated what it had said on March 11, in particular that it believed that “Cofina violated the purchase and sale agreement dated September 20 and amended on December 23 2019” regarding the sale of the entire stake held by the Spanish company in the subsidiary Vertix SGPS, which holds 94.69% of Media Capital.
Prisa also said that it had “initiated and will continue to seek all measures and actions against Cofina in defense of its interests, its shareholders and any others affected by the situation created by Cofina.”