Shares in Italy's Mediaset Surge on Investor 'Bargain Hunting'

Mediaset logo

The shares reached an all-time low of $1.47 on Friday but since then have risen nearly 13 percent over four trading sessions.

ROME – Shares in Silvio Berlusconi’s television and cinema giant Mediaset have risen in every trading session this week after reaching a new all-time low on Friday, but analysts said it was unlikely there was any significant change in the company’s fundamental health behind the change.

Mediaset shares closed Friday at €1.16 ($1.47) per share, their lowest-ever close. But over the next four trading days they rose nearly 13 percent to close Thursday at €1.31 ($1.66), leaving them poised to record their biggest one-week rise this year -- barring a drop on Friday. Speculation that the share price might have been on the move due to some unreported speculation increased with a dramatic spike in trading volume over the last two sessions.

But analysts said it was probably a technical rally, and that the company’s underlying problems remained.

“Look at it as a strong week sparked by bargain hunting,” said Oliviero Fiorini, an analyst with ABS Securities in Milan. “Just six months ago a share price of €1.16 for Mediaset would have been unimaginable.”

In August, Mediaset shares rose nearly 14 percent in two days on speculation that an unnamed Middle Eastern advisor was poised to take a stake in the company. But the investor never emerged and the shares lost their gains nearly as quickly as they added them.

Over the last 12 months, the shares have lost nearly a third of their value, and they are now nearly 81 percent below their recent peak of €6.44 ($8.18) in March 2010.

Mediaset, which owns three national television networks in Italy and one in Spain, plus the Medusa cinema distribution and production house, and multiple media holdings, has been hurt lately by severe drops in ad revenue, the country’s slow economic growth, and the personal and legal scandals of Berlusconi, the company’s billionaire founder and a former Italian prime minister.

The company recently sold its home video subsidiary Medusa Home Video to Warner Bros. Italia, and it is reported to be shopping its stakes in The Space Cinema exhibitor chain and its Mediaset Premium service.