Italian MFE wins support from two shareholder funds of the Impresa media group

Two of Impresa’s main shareholders have opposing strategies regarding their stake in the company, but they agree on one point: the entry of Italy’s MediaForEurope (MFE) into the capital would be beneficial.

While GNB Portugal Ações has reduced its position in Impresa, Sixty Degrees Ações Portugal has bet heavily on the group that owns the SIC television station and the weekly newspaper Expresso, at a time when the company is going through one of the worst financial crises in its history.

The strategic divergence between the two national equity funds reflects the uncertainties surrounding Impresa, which needs a recapitalisation of around €80 million to rebalance its accounts. The company recorded consolidated losses of €66.2 million in 2024, causing its equity to fall to just €89.7 million, representing financial autonomy of only 26%.

Pedro Barata, manager of GNB Portugal Ações, cut the fund’s position in Impresa by 28% between April and August. At the end of August, the fund held more than 1.8 million Impresa shares, equivalent to 2.2% of the free float, with Impresa representing only 0.3% of the fund’s portfolio in August.

“We have been aware of the company’s financial difficulties for some time and have been selling our position, which is now very small and has no impact on the size of the fund”, the manager told ECO.

Sixty Degrees Ações Portugal, managed by Virgílio Garcia, has a different strategy, increasing its position in Impresa by 46% between December and August. The fund now holds more than 670,000 shares in the company, equivalent to 0.8% of the free float shares, and weighing 0.31% in the national equity fund’s portfolio in August.

However, this does not mean that this was a particular bet by Virgílio Garcia’s team on Francisco Pinto Balsemão’s company. The increase in the position in Impresa mirrored the increase in Sixty Degrees Ações Portugal’s assets during this period, which led the manager to seek to maintain Impresa’s relative position in the fund – as was the case with most of the other positions.

“We have had increasing subscriptions. Every time this happens, we make a basket that buys a replica of the existing exposure. If I had 0.3% of Impresa, when €50,000 comes in, I buy 0.3% x €50,000 of Impresa”, explains Virgílio Garcia.

Optimism with the arrival of the Italians

Diogo Avelar, equity analyst at Sixty Degrees, sees the potential deal as a natural evolution of the sector. “It is a natural move amid European media consolidation and the ‘battle’ against new non-traditional players/digital platforms”, he explains.

The analyst highlights the advantages that the Italians can bring. “The Italian company, with extensive experience in the sector, has been looking for assets across Europe (I think Germany and Spain are the current targets)” and “brings not only financial power, but also knowledge of the sector”.

Pedro Barata also views MFE’s entry into Impresa’s capital with optimism. “If MFE’s entry goes ahead, I think it will be beneficial for Impresa. At a time when Impresa is experiencing financial difficulties, the entry of a new shareholder with financial muscle and investment capacity should be viewed positively”, he says.

However, when asked about plans for GNB Portugal Ações’ position in Impresa, the manager prefers not to comment at a time when the group is negotiating with the Italian Berlusconi family. Virgílio Garcia, manager of Sixty Degrees Ações Portugal, is adopting a wait-and-see strategy: “For now, we intend to maintain our position until we understand the full scope of the operation and the potential for improvement it may bring.”

This position reflects the uncertainty surrounding the final terms of the deal between Impreger, the holding company that controls 50.31% of Impresa and is majority-owned by the Balsemão family through the Balseger holding company, and MediaForEurope (MFE), the Italian giant owned by the Berlusconi family.

According to sources close to the process, the deal could mean a change in Impresa’s shareholder control, with the Italians acquiring 75% of Impreger. If confirmed, this will require a takeover bid (OPA) for Impresa SGPS, in accordance with the Securities Code.

MediaForEurope, with consolidated revenues of €2.95 billion in 2024 and profits of €137.9 million, has the financial strength necessary to resolve Impresa’s structural problems, experts say. The Italian group recently demonstrated its European ambition by securing more than 75% of Germany’s ProSiebenSat.1.

For the managers of the two funds, regardless of their divergent strategies, it is clear that the entry of the Italians represents an opportunity for salvation for a company that, on its own, will find it difficult to overcome the current financial crisis. The question that remains is whether the current minority shareholders will benefit from this operation, which could redefine the Portuguese media landscape.

However, Diogo Avelar stresses that this operation is not an end in itself, but merely the potential beginning of something. “Impresa’s accounts still have a lot of work ahead of them. Although the Portuguese market is small, there is room for improvement.”