Berlusconi’s Mediaset to End Five-Year Fight with Vivendi

Mediaset SpA, Italy’s largest commercial broadcaster, reached an agreement with French media conglomerate Vivendi SE to end an acrimonious, five-year dispute over a scrapped pay-TV deal.

Ex-Premier Silvio Berlusconi’s Mediaset and Vivendi -- controlled by French billionaire Vincent Bollore -- agreed to drop all legal disputes across Europe. As part of the deal, Vivendi will sell most of a stake built up in a failed takeover attempt in late 2016, and Mediaset shareholders will vote on an extraordinary dividend.

Mediaset rose as much as 6% in Milan on Tuesday following the resolution of the dispute.

Vivendi owns about 19% of Mediaset via a trust called Simon Fiduciaria and will sell that over the next five years, while Fininvest -- Berlusconi’s holding company -- plans to buy a 5% stake owned directly by Vivendi for an ex-dividend price of 2.70 euros a share. The deal, reported earlier by Bloomberg, will leave the French media company with a remaining holding of 4.6% in Mediaset.

The two companies have been fighting since July 2016, when the French company walked away from a plan to buy Mediaset’s pay-television unit in a share swap valued at about $1 billion. Mediaset has sought billions of euros in damages from Vivendi for abandoning the deal.

Vivendi’s decision “frees both parties to pursue mutually respectful media M&A strategies,” Bloomberg Intelligence analyst Matthew Bloxham wrote in a note Tuesday. The move could help unlock much-needed consolidation in Europe’s ad-funded TV sector, he added.

‘European House’

The agreement could free Mediaset to restore focus on its plans for pan-European projects. Chief Financial Officer Marco Giordani said last week that the company is even more convinced that it needs to build a “neutral European house” to potentially aggregate players. Mediaset already owns a stake in German broadcaster ProSiebenSat.1 Media SE.

A few months after the deal failed, Vivendi gradually bought almost 30% of Mediaset in a move the Italian company alleged was illegal. Last month, a Milan court ruled against claims by Berlusconi’s companies for as much as 3 billion euros ($3.6 billion) in damages against Vivendi, according to court documents seen by Bloomberg.

The court also said that Vivendi’s stake-building did “not constitute the contested conduct of unfair competition” and dismissed the broadcaster’s complaint. Vivendi is also the largest shareholder of Italy’s former phone monopoly Telecom Italia SpA.

Berlusconi’s Mediaset to End Five-Year Fight with Vivendi

Last September, Vivendi won a court case, allowing it to keep its stakes in both Mediaset and Telecom Italia after European Union judges delivered a blow to Italian rules curbing the power of media moguls.

In another legal dispute, prosecutors alleged Bollore engaged in market manipulation, intentionally driving down Mediaset’s share price and obstructing the work of Italian market regulator Consob, according to a statement last December. Vivendi has denied wrongdoing.

Netherlands Plan

Under the settlement, Vivendi will vote in favor of Mediaset’s plan to move its headquarters to the Netherlands from Milan as well as support the end of double voting rights.

Also at Mediaset’s shareholder meeting, which is scheduled for June 23, Fininvest will propose the distribution of an extraordinary dividend of 0.30 euros per share to be paid out on July 21.

Vivendi’s Dailymotion agreed to pay 26.3 million euros to settle copyright litigation with units of Mediaset.

Mediaset founder Berlusconi was recently released from a Milan area hospital after about three weeks of treatment for an undisclosed condition.

©2021 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.