Former Berlusconi Aide Cairo Plans Italian Publishing Merger

  • Publisher Cairo offers to buy Italy's top-selling newspaper
  • Acquisition would add to Cairo's TV, magazine assets

As Silvio Berlusconi resets his Italian television empire, a former aide is showing ambitions of his own to build a publishing powerhouse.

Urbano Cairo, Berlusconi’s personal assistant in the 1980s turned media executive, wants to unite his TV and magazine assets with the publisher of Corriere della Sera, Italy’s top-selling newspaper. Late Friday, the same day Berlusconi struck a deal for his TV assets with French billionaire Vincent Bollore, Cairo offered to buy RCS MediaGroup SpA, and vowed to turn around a company hurt by falling readership and lack of advertising.

“RCS has several issues and suffered a lot, especially in the past five years, but I can see great potential in it -- a turnaround is possible," Cairo, 58, said in an interview late Friday.

Besides his pedigree as Berlusconi’s sidekick, Cairo can point to his success turning around another Italian media asset. He bought the money-losing TV channel La7 from Telecom Italia SpA for about $1 million in 2013, making it profitable through cost reductions.

Under Cairo’s proposal, RCS investors would get 0.12 of Cairo Communication SpA shares for each common stock they own. Shares of RCS jumped 25 percent to 57 cents at 2:49 p.m. in Milan, valuing the company at 297 million euros ($339 million). Cairo Communication advanced 1.6 percent to 4.80 euros, for a market value of 376 million euros.

The publishing empire envisioned by Cairo would challenge the media assets of the Agnellis, the powerful heirs to the Fiat fortune who own newspapers including La Stampa. To expand its media business, Fiat Chrysler Automobiles NV agreed this year to join La Stampa with the company that publishes the daily la Repubblica and the weekly magazine L’Espresso.

Fiat said at the time it would dispose of its stake in RCS, where it’s the largest investor. Cairo said he hasn’t been in touch with Fiat to acquire its RCS stake, opting instead for a “transparent takeover.”

Cairo already competes with the Agnellis in areas such as sports. Cairo is the owner of Torino Football Club SpA, a historical cross-town rival of Juventus Football Club SpA, which is controlled by the Agnellis’ investment company Exor SpA. RCS also publishes the top-selling sports daily Gazzetta dello Sport.

RCS reported sales of about 1 billion euros last year and had net debt of 487 million euros. Cairo Communication, which also publishes news magazines, had full-year revenue of 260 million euros.

Cairo said his offer isn’t hostile, even though he didn’t inform RCS’s board in advance. Corriere della Sera will remain independent if the bid succeeds, Cairo said.

Urbano Cairo, born in Masio, near Alessandria in northern Italy, joined the Berlusconi family’s holding company Fininvest SpA in the early 1980s after obtaining a degree in finance at Milan’s Bocconi University. He founded Cairo Communication in 1995, focusing initially on advertising, and the company had an initial public offering in 2000.

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