Vivendi Discloses 3% Stake in Italy's Mediaset SpA -- 2nd Update

By Manuela Mesco and Nick Kostov 

MILAN -- French firm Vivendi said Monday it owns a 3% stake in Italy's Mediaset SpA, and intends to continue to buy shares to build a stake of up to 20% in the Italian broadcaster.

The decision comes as the two firms are about to fight in court over the validity of a deal signed earlier this year. In April, they reached a partnership agreement under which they would reciprocally swap a 3.5% stake and Vivendi would buy Mediaset's pay TV business.

But afterward Vivendi asked to change some of the terms of the deal, leading to a lawsuit launched by Mediaset against the French media company.

"Becoming a Mediaset shareholder is...in line with the group's intention to develop its activities in Southern Europe and its strategic ambitions as a major international, European-based, media and content group," Vivendi said.

Vivendi said it believes that that the strategic interest of the industrial partnership announced in April "supersede the stakes of the lawsuit." As such, it plans to continue to acquiring Mediaset shares "depending on market conditions, until possibly becoming Mediaset's second largest industrial shareholder," with a stake of up to 20%.

According to Mediaset, Vivendi is shifting from an industrial agreement to a takeover attempt. It added that Vivendi is benefiting from the 30% plunge in Mediaset's share value in recent months caused by the decision not to go ahead with the Vivendi deal. It also said it hadn't been notified of Vivendi's intentions.

A person close to the company called Monday's move "a hostile action."

Mediaset's main shareholder, the holding company Fininvest, said that it will take all the necessary measures to keep its shareholding role in the Italian broadcaster and that it will use all possible means to block the operation.

Fininvest accused Vivendi of pressuring Mediaset's share price to launch a "hostile takeover bid" at a discount price.

Run by Chairman Vincent Bolloré, Vivendi is seeking to piece together a media empire focused on southern Europe with interests in TV, music and videogames. But Mr. Bolloré has ruffled feathers in recent months, falling out with the founders and managers at videogame publisher Ubisoft SA and more recently with Mediaset.

Mr. Bolloré, who as chairman of Vivendi calls the shots with a stake of over 20%, has made a fortune over the past three decades seizing control of businesses, sometimes in quick raid, sometimes in a long, slow immersion.

Vivendi said in October it had given up on finding an amicable solution with Mediaset after the two sides traded barbs over who was to blame for the collapse of the deal.

Write to Manuela Mesco at [e-mail] and Nick Kostov at [e-mail]

(END) Dow Jones Newswires

December 12, 2016 18:12 ET (23:12 GMT)

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