This analysis was first published in SvD Näringsliv, in Swedish, on January 9th, 2024. This piece was translated from Swedish by Claude. Some phrasing may differ from a human translation.
When Viaplay convenes for an extraordinary general meeting, the options are very few. Either shareholders approve the board’s plan, or the company risks collapse. The cost, however, is very high — especially for small investors.
On Wednesday at 10am, Viaplay’s registered shareholders will gather at Stockholm Waterfront Congress Centre. The board has called an extraordinary general meeting to vote on a proposed recapitalisation.
In normal circumstances, a general meeting is something of an administrative affair. Management gives a brief presentation, formalities are voted through, there is coffee.
That is unlikely to be the case this time.
Viaplay’s share price has fallen more than 97 percent compared to a year ago. There will probably be more than a few shareholders who are not entirely happy with that development.
The board’s proposal to rescue the struggling company is to carry out a rights issue and a directed share issue to the company’s lenders and its two largest shareholders — French media giant Canal+ and the Czech fund PPF. The result is a dilution that, for other shareholders — every small investor included — will be enormous.
The problem for all shareholders is that there is no realistic alternative. In recent days, Viaplay announced that a majority of its lenders had accepted the terms of the board’s proposal — a precondition for the plan to hold together. But even for the lenders, the alternative would likely have been worse. There is a single proposal on the table — one that significantly strengthens the major shareholders’ position, since they are putting in new money. In this situation, getting something back on your loan is better than getting nothing at all.
In the search for other conceivable paths forward for Viaplay, one major shareholder is conspicuously absent: Norwegian media group Schibsted, which among other things owns Svenska Dagbladet. Schibsted bought 10.1 percent of Viaplay in September 2023 but was immediately punished by the stock market, which did not welcome the new media investment. Schibsted’s share price fell around 3 percent immediately, making the investment costly from the outset.
There was likely a thought that Schibsted could use the Viaplay stake to strengthen its position as a Nordic media owner. By gaining visibility — and owning enough to participate in all negotiations about the company’s future — it could help shape the direction Viaplay would take.
But when the new plan for Viaplay was announced, Schibsted was not even mentioned.
The Norwegian media group had its own transformation agenda, announcing in December that it would split the company in two. Schibsted’s media operations are to be delisted and held entirely by the Tinius Foundation. The marketplaces — such as Blocket.se — will remain listed, but under a different name.
A notable detail in this deal was the shares in Viaplay specifically. Despite Viaplay’s clear media profile, they were not to be included in the media operations being spun off. The Tinius Foundation evidently does not want them.
Without owner support, Schibsted could no longer participate in finding alternatives for Viaplay’s future. That avenue is therefore closed. The 380 million kronor that Schibsted invested in Viaplay less than six months ago can essentially be written off.
With no clear alternatives, Viaplay’s board has had to turn to the remaining major shareholders, Canal+ and PPF, to ask for money. And when you negotiate with a single party, the terms are poor. This case is no exception.
The small investors in Viaplay — who are likely furious — might have been more tolerant of the board’s proposal if it were not the same board that got the company into these problems in the first place. They approved extravagant investments in international expansion, the purchase of expensive sports rights, and large-scale bets on content production.
Former CEO Anders Jensen’s strategy was highly aggressive — and evidently entirely wrong. He did resign in June last year, when Viaplay issued a profit warning and the current crisis began to surface. The board remains in place. At Wednesday’s general meeting, they are likely to hear a few things about how their responsibilities have been exercised.
