French media conglomerate, Vivendi, announced on Friday that it would acquire a 7.6% stake in Prisa to expand its reach to Spanish-speaking markets.
Prisa is the world’s leading Spanish and Portuguese-language media group with a presence in 24 countries. The group creates and distributes content around culture, education, news and information, and entertainment. Vivendi (0IIF) believes that clear synergies exist between the two companies.
“Buying shares in PRISA is part of Vivendi’s ongoing strategy to become a global leader in content, media and communications, while extending its access to the Spanish-speaking markets in Europe, Latin America and US Hispanics,” the company said in a statement.
Prisa’s Joseph Oughourlian said, “PRISA welcomes the investment of an industrial shareholder such as Vivendi, one which recognizes the value and the potential of PRISA’s assets and brands. Vivendi’s investment provides the strength and security necessary for PRISA’s future project and endows it with an important new ally to successfully see those plans through.” (See 0IIF stock analysis on TipRanks)
UBS analyst Richard Eary reiterated his Buy rating on Vivendi last week, setting his price target at €36. This implies upside potential of around 36% from current levels.
Eary believes that the first half of 2021 will see a continued rotation into cyclical values following a difficult year for the media and advertising sector, but he expects a significant recovery in the second half of the year.
Consensus among analysts is a Strong Buy with all six analysts covering the stock in the past three months assigning a Buy recommendation. The average price target of €34.10 suggests upside potential of around 28% over the next 12 months.
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