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This article was published April 29, 2016 at 6:57.
For someone like him allergic to losses and who lives the cost-benefit balance of its activities with a kind of painstaking obsession, that he must be a lot weighing loss millionaire. It is on RCS, now become its potential prey, which Urbano Cairo is serving one of the only (for now) failures of his career.
That investment in securities of the publisher of the Corriere della Sera has so far cost 31.3 million euro. And prices touched before the launch of its exchange offer that package of 24 million shares worth just under 10 million. With the upward breakout in the aftermath of its offer virtual loss is lightened to “only” 16 million. But always lost it.
And maybe for a man used to winning, hold a minority stake (4.6% of capital) of a company in crisis for years and to be relaunched it was not a sustainable position for a long time.
Cairo came later between the past, compared to other historical shareholders in RCS, only in 2013, perhaps thinking that the worst was behind them. He was wrong of course, with the benefit of hindsight. Now plays the card of his life. Become the controlling shareholder of the former first Italian publishing group. He will offer his card being securities of Cairo Communication to the existing RCS shareholders and in return, if the bid proves successful, it will become the controlling shareholder noting not only equity but also that debt by half a billion in the hands of the Courier Company della Sera.
Will it make to support the weight? Those who know him say he has done well for his accounts. Moreover, even when you always ventured in the spring of 2013 to the conquest of La7, many thought that purchase could turn into a boomerang for the whole of his small publishing empire. TV of Telecom drowning in a sea of losses: 65 million passive already at the level of gross margin. A year and a half after nursing Cairo, EBITDA turned positive for 9 million at end 2014. 2015 was closed with an inferior result (EBITDA just 1.6 million) but still positive. Revitalization and operational restructuring carried out in a flash. But Cairo is famous as an entrepreneur capable in the long history of its Cairo Commnication: listed in 2000 at the peak of the Internet bubble his publishing house still operates at a loss one year. Product has accumulated profits of 250 million, and since 2009 as the crisis bit into the entire publishing industry Cairo Communication held blow with an increasingly industrial margin around 10% of turnover. Only last year the group has decelerated: profits more than halved to 11 million from 23 million in 2014; Revenue arrears to 236 million from 252 million a year earlier. In fact the peak of Cairo revenues was in 2012 with 280 million. But with the widespread crisis remains the group with the greatest return. And most liquid and hyper-capitalized. The Cairo has free cash of 105 million and a net capital of 116 million.
There is a secret in this anomaly Italian publishing? Evidently more than one. Certainly his publishing is popular national. Weekly, monthly gossip, cooking, leisure with high diffusion volumes with very low unit costs. Then there is the fine coated publishing of the former Giorgio Mondadori (Heron, Bell’Italia; Bell’Europa) also with increasingly positive margins and finally La7 where the recovery of operating costs and the keeping of advertising revenues now make it a rib reorganized the group. It lacks the newspaper where it is more difficult to get profitability. He could tell the truth to put on the plate the chest at its disposal: those 105 million accompanied by a debt leverage of the same amount would have allowed him to buy almost all the shares on the market. But he meant to launch a takeover bid on the entire group. With the stock exchange must not dip into its cash and “sells” the Cairo action to those who own the RCS. Clever and smart move. Because it brings out the cash that has accumulated over time, when it can be diluted by swapping their bonds while maintaining majority control over his Cairo? The operation RCS climbing involves the assumption of that debt by half a billion. Better to keep assets and cash ammunition for the future. Forever if he will become the new owner of the Corriere della Sera.
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