Mediaset: Board Rejects Vivendi's Proposed Changes to Pay-TV Deal--Update
July 28 2016 - 01:03PM
Dow Jones News
By Deborah Ball
MILAN -- The board of Italian broadcaster Mediaset SpA rejected
new changes proposed by France's Vivendi SA to a pay-TV deal
between the two companies, setting up a bitter showdown between two
of Europe's media giants.
In a statement, Mediaset said the company will adopt "all
necessary measures" to enforce an agreement between the two
companies and threatened legal action if Vivendi fails to respect
the accord.
In April, Vivendi agreed to acquire Mediaset's pay TV unit in a
deal that also included a 3.5% share swap between the two
companies.
But earlier this week, the French company sent a letter to
Mediaset, which is controlled by the family of former Italian
Premier Silvio Berlusconi, in which it proposed new terms: Vivendi
would buy only 20% of the pay TV unit, but would also acquire 15%
of Mediaset itself in three years.
Vivendi said it was seeking to amend the contracts after
"significant differences in the analysis" of the results of the pay
TV unit, Mediaset Premium, emerged after the companies signed the
deal.
Mediaset has struggled for some time to bring the loss-making
pay TV unit back to health and looked to the Vivendi deal as a
solution to a long-running problem.
In statements Tuesday, it blasted the new proposal, while
Fininvest SpA, the Berlusconi holding company that controls
Mediaset, accused Vivendi of attempting to build "an extremely
large stake in Mediaset in an underhanded and unacceptable
way."
Vivendi instead expressed optimism that it could strike a new
deal with the Italian company, with Vivendi CEO Arnaud Puyfontaine
saying Tuesday that the French group hopes to build an "even more
ambitious relationship" with the Italians.
A Vivendi spokesman responded that "contrary to what Mediaset
contends, Vivendi honors its commitments and will not accept
accusations to the contrary," adding that the April agreement was
based on a business plan "that proved to be wildly optimistic or
even totally unworkable."
He said that Vivendi reserves "the right to pursue Mediaset for
defamation" following its statements.
Write to Deborah Ball at deborah.ball@wsj.com
(END) Dow Jones Newswires
July 28, 2016 12:48 ET (16:48 GMT)
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