Deal Contingent Hedging Television, Europe

Client Brief

A producer of a number of well-known television programmes was going to be purchased by a financial sponsor. As a result of its media presence around the world, there was still some uncertainty about whether the transaction would be permitted by some European competition authorities, even as the deal moved towards completion. Notwithstanding this uncertainty, the client was keen to hedge its exposure to rising interest rates on its debt.

PMC Solution
  • Identify the appropriate ‘deal contingent’ hedge strategy to enable the company to be protected (post-completion) if the deal completed but be able to walk away if it did not;
  • Execute a number of ‘dry runs’ to force the banks to fine-tune their pricing and identify the key two or three institutions that were best placed to be counterparties;
  • Provide detailed commercial input into the drafting of the deal contingent hedge contract, working closely with the client, banks and respective lawyers;
  • Orchestrate the final hedging process, ensuring optimum pricing for the client.
Results & Recommendations

At the end of this process, we assisted our client to achieve its twin objectives of price certainty and flexibility in the light of unknown future events.