Vivendi Says Finding an 'Amicable Solution' With Mediaset No Longer a Priority -- 2nd Update

By Noemie Bisserbe and Manuela Mesco

French media company Vivendi SA (VIVEF, VIV.FR) said Wednesday it is no longer prioritizing an amicable solution to its dispute with Mediaset SpA (MDIUY, MS.MI), as the spat with the Italian company over a deal on its pay-TV business is proving harder and taking longer to solve.

In April, Vivendi agreed to acquire Mediaset's pay TV unit in a deal that included a 3.5% share swap between the two companies.

The deal was to be an important step in Vivendi's ambitions to build a pan-European business strong enough to challenge Netflix Inc. and Sky PLC. It was also seen as a boon to Mediaset, which has long struggled to bring its pay TV unit back into the black.

But the French media firm changed the terms of the previously agreed deal as it claimed that the business plan of Mediaset's pay-tv division received was based on "unrealistic assumptions." The Italian firm reiterated that the analysis of the business was done before signing the deal. It also lamented that Vivendi's claims can cause damages to Mediaset's stock price.

In July, Vivendi sent the Milan-based firm a new proposal to acquire only 20% of the pay-TV unit, plus 15% of Mediaset itself in three years.

Mediaset, which is controlled by the family of former Italian Prime Minister Silvio Berlusconi, branded the deal as an attempt to launch a creeping takeover. It claimed that the contract is binding and couldn't be cancelled.

In August, both Mediaset and its largest shareholder, Fininvest SpA, filed requests with a Milan court to seek an enforcement of the contract signed and claimed compensation for damages already caused. More recently, the Italian broadcaster requested a sequestration against 3.5% of Vivendi's shares.

A first hearing at a Milan court is slated for Nov 8.

The French firm has until recently showed confidence that a solution could be found and said on Wednesday that it has kept contacts with Mediaset to find alternative options favorable for both firms.

"The only response to Vivendi's constructive approach was for Mediaset and Fininvest to issue aggressive public statements," Vivendi said in a statement on Wednesday.

But Mediaset replied that there have been no contacts between the two firms since July.

Vivendi added that it is "no longer willing to give priority to finding an amicable solution and reserves the right to take all necessary action to defend its interests and those of its shareholders."

Write to Noemie Bisserbe at [e-mail] and Manuela Mesco at [e-mail]

(END) Dow Jones Newswires

October 19, 2016 14:45 ET (18:45 GMT)

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