Leonardo Maria Del Vecchio stops the plan to acquire Fatto Quotidiano. Lmdv Media has announced that, “at present”, it will not proceed with the offer on the newspaper’s publishing company, Seif. What closed the road were the refusal of the board of directors to allow the requested in-depth analysis of the accounts and the decision of the founding members not to sell their shareholdings.
The operation therefore stops before the launch of the takeover offer. In the note released by the entrepreneur’s investment company, the waiver is motivated by the impossibility of obtaining the information considered essential to complete the evaluation.
The project worth over 7 million euros
Lmdv’s plan envisaged a consideration of 0.286 euros per share, giving the entire capital of Seif a value of approximately 7.15 million euros. The proposed price incorporated a premium of approximately 30 percent compared to the stock market closing on Friday 23 October. The ultimate goal was to gain control of the company and take it off the stock market.
Before proceeding, however, Lmdv had set some conditions. The main one was due diligence, i.e. an examination of the economic and financial situation of the publishing house. In particular, Del Vecchio’s company wanted to verify the cash needs for the next two years and ensure that the additional resources required to support the business did not exceed four million euros, as hypothesized in its preliminary assessments on public documents.
That figure therefore represented an estimate of Lmdv to be verified, not a requirement ascertained through access to the accounts.
The wall of the founding members
Seif’s ownership structure also had an impact on the acquisition. The statute provides for a limit of 17 percent on the participation of each shareholder, introduced to prevent the newspaper from ending up under the control of a single investor. To carry out the project it would have been necessary to remove this constraint through a statutory amendment.
The founding partners, who together hold over half of the capital, had however already ruled out both the sale of their shares and participation in a possible takeover bid. A position that made the passage of control impracticable under the proposed conditions. The board of directors’ subsequent no to the requested checks preceded the announcement of the stop.
Lmdv’s response on journalists and independence
In communicating the decision, Lmdv reiterated its vision of the editorial activity: technological investments, contractual stability and adequate compensation for journalists, including collaborators and freelancers. “There is no editorial independence without journalists empowered to work,” the company claims.
Lmdv also claims the guarantees proposed for the Fact: a golden share entrusted to a guarantee committee, the protection of the management and editorial line and the full reinvestment of profits.
The acquisition attempt had taken place in an already conflictual climate, after several articles in Il Fatto on Del Vecchio’s activities and interests. The newspaper had presented the entrepreneur’s initiative as a response to its own investigations. Now the project is interrupted, albeit with a formula that limits the renunciation to the current situation.