MEDIASET SIGNED FOR THE ACQUISITION OF MEDUSA

AGREEMENT SIGNED FOR THE ACQUISITION OF MEDUSA MEDIASET BETS ON ITALIAN CINEMA AFTER ENDEMOL, ANOTHER STEP TOWARDS GREATER CONTROL OF CONTENT

Renewed top management at Medusa:
Carlo Rossella, chairman, Giampaolo Letta, MD
Mediaset S.p.a. has reached an agreement with Fininvest S.p.A. to buy
100% of the share capital of the Medusa Group. The closing of the
operation is expected to take place on 16 July 2007.
Fininvest S.p.A. has a 35.97% stake in Mediaset S.p.A. and owns 100%
of the Medusa Group.

The value of the operation for Mediaset

The acquisition of Medusa, national leader in film production and
distribution, is for Mediaset an operation of strategic significance that will:
• reinforce the company’s position in the content area (following the
recent Endemol operation) focused production and the exploitation of
film rights which are a primary resource across all platforms;
• allow direct and growing involvement in the production of Italian
cinema, a relevant feature of the scheduling requirements of the
Mediaset Group’s channels, which thanks to recent investments will
translate into growth across the entire sector and support the cultural
value of national production;
• generate further diversification into areas adjoining its “core business”
(theatrical management, home video)

The nature of the agreement

The price for the operation, which is of €152 million, has been calculated
on the basis of the net assets of the Medusa Group at 31/12/2006.
In the form of an integration of the price, Mediaset S.p.A. has promised
to pay to Fininvest S.p.A. a balance of up to a maximum of €18 million, to
be related to box office receipts from films distributed in the 2007-2008
seasons.

In support of the resolutions made by Mediaset’s boards regarding the
operation, the investment bank Lehman Brothers International has
determined that the price is in line with market values.

What is the Medusa Group

The Medusa Group operates in the production and distribution of Italian
and international films, cinema management, the development of
multiplex complexes and home entertainment.

The main companies of the Medusa Group are the parent company
Medusa Film and the companies Medusa Cinema, Medusa Multicinema
and Medusa Video, all of which are wholly-owned subsidiaries.
• Medusa Film is engaged in film production (investments in Italian
cinema production amounts to around €65 million) and the distribution
of films and rights for theatrical release, free-to-air television, pay-TV
and pay-per-view. In the distribution sector, in 2006, Medusa came
overall second and was the top Italian company with a market share of
13% (in 2005 it was in the fourth and second places respectively, with
a market share of 10.3%). In the current season, which began on
1/12/2006, Medusa is the overall leading distribution company with a
market share of around 18%.
• Medusa Cinema and Medusa Multicinema are among the biggest
cinema operators in the Italian market in terms of tickets sold and the
number of screens (with a network that covers Italy’s most important
cities, above all in the north of the country). The companies currently
run 101 screens, of which 100 are in multiplex complexes and one in a
traditional theatre.
• Medusa Video operates in the home entertainment sector, where it is
among the leading Italian players in the distribution of films,
documentaries, cartoons, and TV programmes on videocassette and
DVD.
Business results and assets of the Medusa Group
Here are the financial highlights of the Medusa Group for the year to 31
December 2006:
• the Medusa Group’s consolidated net assets at 31/12/2006 amounted
to €152 million
• net revenues: €195.5 million (+18.3% on 2005)
• operating profit was up compared with 2005: from -€3.0 to +€16.8
million
• net profit was up compared with 2005: from -€4.6 to +€6.7 million
• the consolidated net financial position was up on 2005: from -€85.7 to -
€55.0 million

New top management

In view of the announced resignation of the board of directors of the
Medusa Group, that will be formalised before the closing of the
operation, Mediaset’s executive committee, which met today, has drawn
up the new top management for the company.

Carlo Rossella, who will step down as editor of TG5, has been
nominated to take over as chairman. Rossella, after an extraordinary
journalistic career which has seen him as the editor of national daily
newspapers, newsmagazines and TV news programmes, has the ideal
experience and authority to be the chairman of a company like Medusa
that is engaged, at a national and international level, in editorial and
cultural activities.

Giampaolo Letta has been confirmed in his role as deputy chairman
and managing director and will guarantee great experience and
continuity in the management of the various aspects of film production
and distribution.

Cologno Monzese, 3 July 2007

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e-mail: ufficiostampa@mediaset.it
http://www.gruppomediaset.it

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