(News Bulletin 247) – The TF1 title is down 2.7% after the announcement of the abandonment of the merger project with M6.

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Following this announcement, Oddo downgrades its recommendation on TF1 to Neutral. The analyst maintains M6 at Outperformance. The target price for the latter is lowered to 26E; that of TF1 also fell from 12.5 to 11E today.

‘The two groups anticipated a refusal from the authority, in particular because the remedies which were required were too great (cession of M6)’, notes Oddo.

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‘This abandonment has no impact on our earnings outlook for TF1 and M6 since we had not integrated any synergy’, continues the analyst for whom the situation remains more favorable to M6 than to TF1.

‘ RTL Group (which owns 48.26% of M6) should probably seek to sell the group quickly. Altice, MFE, CMI and even Vivendi are credible buyers’. In this context, Oddo continues to apply a speculative premium of 15% to its valuation of M6.

Conversely, TF1 should not be sold and therefore does not benefit from any premium. ‘TF1 could consider accelerating its development in TV production and better balancing its portfolio of activities between TV and production’, imagines the analyst in his most credible scenario.

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