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Vivendi: “Make war, not love”

One equity analyst has called the speedy Vivendi acquisition of Mediaset stock (at 20 per cent, and perhaps counting) represents “a rapid invasion” and asks whether Vivendi’s move will hold steady or advance further.

Cheekily, Sarah Simon, equity analyst at Berenberg Bank, in a report (‘Bollore vs Berlusconi’), said “France has not invaded Italy since Napoleonic times, but on Monday the announcement that Vivendi had built a 3 per cent stake in Mediaset, which it intended to increase to 10-20 per cent (at least initially), was taken by the Italians as a declaration of war, a hostile attack on the company.”

She continues: “With Vivendi now at 20 per cent, and Fininvest having increased its voting rights to just under 40 per cent, the hostility between the two companies has reached what we probably cannot call a peak – who knows what will come next – but certainly has grown so bad that even Italian politicians, hardly supportive of Silvio Berlusconi in recent years, have come out in favour of their own kin.”

However, the bank’s report adds: “Given the lack of clarity as to Vivendi’s strategy regarding Telecom Italia and Ubisoft, both of which are 20+ per cent owned by the French holding company, it is difficult to know what Vivendi’s plan is as regards Mediaset. For with Fininvest holding c40 per cent of Mediaset voting rights, it will be very difficult for Vivendi to “force” control. So if a 20 per cent stake cannot give Vivendi material influence, then why go beyond 3.5 per cent? Perhaps this move on Mediaset is designed to scare it, and Fininvest into dropping its lawsuits against Vivendi.”

 ”If Fininvest/Mediaset and Vivendi ultimately end up on speaking terms, what strategic initiatives could result from this? The global OTT platform looks in doubt given that Vivendi recently closed its German OTT operation. One obvious deal could be a combination of Inwit, Telecom Italia’s tower business, with EI Towers, which is 40 per cent owned by Mediaset. Joint content production could also work, since each of Vivendi, Mediaset and Mediaset España have major content activities.”

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