Medigroup Enters into Exclusive Talks With Arnoldo Mondadori to Sell its Book Unit

   By Eric Sylvers 
 

Milan--RCS MediaGroup SpA (RCS.MI), said Friday it had entered into exclusive talks to sell its book unit to a publishing company controlled by Silvio Berlusconi, the former Italian prime minister.

Arnoldo Mondadori (MN.MI), Italy's biggest publisher by revenue, has until May 29 to seal a deal to buy RCS Libri, RCS MediaGroup said in a statement. Italian media have reported that the book unit could be worth as much as 150 million euros.

RCS MediaGroup's shareholders have often been at loggerheads as they jockey over the company's most important asset, Milan-based daily newspaper Corriere della Sera. But with the company having lost more than 1 billion euros ($1.08 billion) in the past four years, and recording net debt of EUR515 million at the end of September, shareholders are struggling to find a way to shore up the publisher's finances and return it to profitability.

The Agnelli family that controls Fiat Chrysler Automobiles (FCA. MI) as well as daily La Stampa is RCS MediaGroup's largest shareholder with a 17% stake. Other shareholders include Tod's owner Diego Della Valle, tire maker Pirelli (PC.MI), influential investment bank Mediobanca (MB.MI) and Intesa Sanpaolo (ISP.MI), Italy's second-largest bank by assets.

Though RCS MediaGroup's shareholders remain divided on whether the book business should be sold, the company's dire financial situation could push them to find an accord for the sale, Italian newspaper la Repubblica reported this week.

RCS MediaGroup Friday also said it had entered into exclusive negotiations with a "leading financial services firm" for the sale of its 44% stake in Gruppo Finelco, owner of three radio stations in Italy.

Write to Eric Sylvers at [e-mail]

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