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Vivendi and Mediaset have reached an agreement to end a long legal battle that will see how the French media conglomerate will gradually sell most of its 29% stake in the Italian chain over the next five years.
The agreement announced Monday night will resolve a conflict between Vincent Bolloré, the French billionaire who controls Vivendi and its businesses, including Canal Plus and Universal Music, against the family of former Italian Prime Minister Silvio Berlusconi, who runs Mediaset.
“Vivendi, Fininvest [the Berlusconi family holding company] and Mediaset is pleased to announce that they have reached a global agreement to end their disputes by waiving all litigation and claims between them, ”the companies said in a joint statement.
The fight began in 2016 when Vivendi agreed to buy Mediaset’s pay-TV business for 800 million euros. The two groups also had to take small minority stakes in the other’s capital to an extent that was intended to pave the way for building a pan-Europe media player to take new streaming players like Netflix.
But the deal it soon fell apart amid a dispute over the valuation of the pay-TV business, with Vivendi accusing Mediaset of inflating financial results. This led Vivendi to build a stake in Mediaset months later, a move the Italian group considered hostile.
A legal dispute arose when Mediaset challenged Vivendi to court. Italian regulators also examined the case, as Vivendi owned a 24% stake in Telecom Italia at the time, potentially violating the rules against media concentration.
The two sides have tried several times in recent years to resolve their differences just to see the talks fail. The catalyst to try again was when a Milan court last month rejected a claim for damages worth 3 billion euros from Mediaset and ordered Vivendi to pay only about 1.7 million euros. ‘euros.
Under the new agreement, Vivendi has agreed to sell shares worth 19.2% of Mediaset gradually over five years at certain set prices, going from € 2.75 in the first year to € 3.10 in the fifth. You can have the entire participation “at any time” if the price of Mediaset reaches € 3.20. Shares closed at € 2.69 on Monday.
The family-owned holding company Fininvest has agreed to buy 5% of Mediaset’s shares at a price of € 2.70 per share. At the end of this process, Vivendi will maintain a residual stake of 4.61% that can be sold at any time or price.
Vivendi could end up selling its Mediaset shares for less than the 1,261 million euros it paid for them in 2016, as they are now worth about 920 million euros. In its 2020 annual report, it revealed an average acquisition price of 3.70 euros per share.
Vivendi has also said it will stop opposing Mediaset’s proposal to change its legal headquarters in the Netherlands, a move aimed at helping it pursue international expansion. Mediaset has said it wants to seek links with other European broadcasters to compete more effectively with broadcasting services.
Both Vivendi and Mediaset are now to the race to buy the second French private television station M6, which is auctioned by parent company RTL Group.
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