Mediaset to sue Vivendi over reduced pay-TV investment
July 29, 2016
From Branislav Pekic in Rome
The Board of Directors of Mediaset said it will take legal action, both civil and criminal, if French media company Vivendi fails to fulfil the original terms of the contract to take full control of pay-TV unit Mediaset Premium.
Mediaset said it has lost €27.8 million in the first half of 2016 (compared with a profit of €24.2 million in the same period of 2015) due to a one-off cash payment related to the signing of the contract with Vivendi. Pay-TV revenues in the same period amounted to €305.5 million (€265.4 million in H1 2015).
In April, Vivendi announced it had reached “a binding accord” to take full control of Mediaset Premium via a 3.5 per cent stock swap with Mediaset.
However earlier this week, Vivendi informed Mediaset it will purchase just 20 per cent of Mediaset Premium and a 15 per cent stake in Mediaset via a convertible bond loan over three years. The French company cited “significant differences in the analysis of the results” of the pay-TV business.
In an interview for Italian daily “Il Sole 24 Ore”, Telecom Italia CEO, Flavio Cattaneo, said that he thinks that Vivendi and Mediaset will be able to reach an agreement in the end, as “it is in everyone’s interest”. He denied a Mediaset-Telecom Italia deal, saying “it’s not on the table now”, but admitted that the issue of content is increasingly important for telecom groups around the world.
Vivendi reiterated that the business plan of Mediaset’s pay-TV unit was based on “unrealistic assumptions”. In a statement seeking to clarify its disagreement with the Italian broadcaster, Vivendi said audit group Deloitte, which carried out a due diligence for Vivendi on Mediaset Premium in June, considered the business plan as “unachievable”.