Mediaset Shareholder Fininvest Files for Contract Enforcement, Damages

By Manuela Mesco

MILAN--Mediaset's largest shareholder, Fininvest SpA, said Tuesday it has filed a request with a Milan court to seek enforcement of a contract with French firm Vivendi SA to sell Mediaset's pay-tv unit.

Fininvest, the holding company owned by the family of Italy's former premier Silvio Berlusconi, is also claiming compensation for a total of 570 million euros for damages already caused, as a contract signed in April has not been honored yet.

In April, the French company agreed to acquire its Italian counterpart's pay-TV unit in a deal that included swapping 3.5% stakes between Mediaset and Vivendi.

But three months later, the French media group sent a letter to Mediaset proposing new terms for the deal. Vivendi would buy only 20% of the pay-TV unit and it would acquire 15% of Mediaset itself in three years.

Vivendi said that it was seeking to amend the contract in light of "significant differences in the analysis" of the financial results of Mediaset's pay-TV unit, Mediaset Premium.

Mediaset's board rejected the changes proposed by Vivendi in July, and threatened legal action should Vivendi fail to respect the accord.

In a statement on Tuesday, Fininvest said that it is seeking compensation for damages it suffered, which include an "undeniable harm" to the company's image and a decrease in the value of Mediaset's shares following Vivendi's proposal to change the terms of the signed contract.

Further damage comes as Mediaset shares' value would have increased had the contract been executed, Fininvest added.

The announcement comes few days after Mediaset itself said it is seeking a separate compensation estimated at EUR50 million a month starting from July 25 for damages stemming from a delay in executing the contract.

The broadcaster said the legal action doesn't include the overall damages the Italian company would suffer if Vivendi fails to respect the accord. Mediaset says the overall damages would top EUR1.5 billion.

Fininvest, which holds a 33.5% stake in Mediaset, previously accused Vivendi of attempting to build "an extremely large stake in Mediaset in an underhanded and unacceptable way."

Vivendi, which is run by French billionaire Vincent Bolloré, rejected accusations adding that the April agreement was based on a business plan "that proved to be wildly optimistic or even totally unworkable."

Write to Manuela Mesco at [e-mail]

(END) Dow Jones Newswires

August 23, 2016 13:12 ET (17:12 GMT)

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