Vivendi and Mediaset have struck a deal to end a long-running legal battle that will see the French media conglomerate gradually sell most of its 29 per cent stake in the Italian broadcaster over the next five years.
The accord announced on Monday night will resolve a conflict that has pitted 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, which runs Mediaset.
“Vivendi, Fininvest [the Berlusconi family holding company] and Mediaset are pleased to announce that they have come to a global agreement to put an end to 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 €800m. The two groups were also to take small minority stakes in each other’s capital in a move billed as paving the way to build a pan-Europe media player to take on new streaming players like Netflix.
But the agreement soon fell apart amid a dispute over the valuation of the pay-TV business, with Vivendi accusing Mediaset of inflating financial results. That prompted Vivendi to build up a stake in Mediaset months later, a move that the Italian group saw as hostile.
Legal wrangling ensued as Mediaset challenged Vivendi in court. Italian regulators also examined the case given that Vivendi owned a 24 per cent take in Telecom Italia at the time, which potentially violated rules against media concentration.
The two sides have tried multiple times in recent years to settle their differences only to see talks fail. The catalyst for them to try again came when a Milan court last month dismissed a €3bn request from Mediaset for damages and ordered Vivendi to pay only about €1.7m.
Under the new agreement, Vivendi has made a commitment to sell shares amounting to 19.2 per cent of Mediaset gradually over five years at certain set prices — from €2.75 in the first year to €3.10 in the fifth. It can dispose of the whole stake “at any time” if the Mediaset price reaches €3.20. The shares closed at €2.69 on Monday.
The Fininvest family holding company has agreed to buy 5 per cent of Mediaset stock at a price of €2.70 per share. At the end of this process, Vivendi will hold a residual 4.61 per cent stake that it can sell at any time or price.
Vivendi may end up selling its Mediaset shares for less than the €1.26bn it paid for them in 2016 given that they are now worth about €920m. In its 2020 annual report, it disclosed an average acquisition price of €3.70 per share.
Vivendi has also said it will now drop its opposition to Mediaset’s proposal to change its legal headquarters to the Netherlands, a move intended to help it pursue international expansion. Mediaset has said it wants to seek tie-ups with other European broadcasters to compete more effectively with streaming services.
Both Vivendi and Mediaset are now in the running to buy France’s second-biggest private TV broadcaster M6, which is being auctioned off by parent company RTL Group.