Vivendi and Mediaset have reached an agreement to end a long legal battle that will see the French media conglomerate gradually sell off most of its 29% stake in the Italian channel over the next five years.
The agreement announced Monday evening will resolve a conflict between Vincent Bolloré, the French billionaire who controls Vivendi and its activities including Canal Plus and Universal Music, against the family of former Italian Prime Minister Silvio Berlusconi, who heads Mediaset.
“Vivendi, Fininvest [the Berlusconi family holding company] and Mediaset are pleased to announce that they have reached a global agreement to end their disputes by waiving all disputes 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 activity for € 800 million. The two groups were also to take small minority stakes in the other’s capital in a move presented as paving the way for building a paneuropean media player to support new streaming players like Netflix.
But the agreement soon collapsed in a dispute over the valuation of the pay-TV business, Vivendi accusing Mediaset of inflating financial results. This prompted Vivendi to build up a stake in Mediaset a few months later, a move the Italian group considered hostile.
Legal wrangling ensued as Mediaset challenged Vivendi in court. Italian regulators also looked into the case given that Vivendi held a 24% stake in Telecom Italia at the time, which could potentially violate the rules against media concentration.
The two sides have tried on several occasions in recent years to settle their differences only to see the negotiations fail. The catalyst for them to try again came when a Milan court last month dismissed Mediaset’s claim for € 3 billion in damages and ordered Vivendi to pay only around € 1.7 million. .
As part of this new agreement, Vivendi has undertaken to gradually sell over five years shares amounting to 19.2% of Mediaset at certain set prices – from € 2.75 the first year to € 3.10 per fifth. He can have the entire participation “at any time” if the Mediaset price reaches € 3.20. The title closed at € 2.69 on Monday.
The family holding company Fininvest has undertaken to buy 5% of the Mediaset shares at a price of € 2.70 per share. At the end of this process, Vivendi will hold a residual 4.61% stake that it can sell at any time and at any price.
Vivendi could end up selling its Mediaset shares for less than € 1.26 billion that it paid for them in 2016 given that they are now worth around € 920 million. In its 2020 annual report, it revealed an average acquisition price of € 3.70 per share.
Vivendi also said it will now drop its opposition to Mediaset’s proposal to change its headquarters to the Netherlands, a move meant to help it continue its international expansion. Mediaset has said it wants to seek links with other European broadcasters to compete more effectively with streaming services.
Vivendi and Mediaset are now in the race to buy the second private French television channel M6, auctioned by parent company RTL Group.
