Vivendi Said Near Deal to Buy Mediaset Premium Controlling Stake

  • Vivendi, Mediaset share swap may be announced next week
  • TV alliance seeks to challenge Murdoch's Sky in Europe

Vivendi SA, the French media company chaired by billionaire Vincent Bollore, is nearing an agreement to get control of Mediaset SpA’s Pay-TV unit in a stock swap as part of a broader alliance to challenge Rupert Murdoch’s Sky Plc in Europe, according to people familiar with the negotiations.

Vivendi and Silvio Berlusconi’s Mediaset are finalizing an accord that may be announced as early as next week, said the people, who asked not to be identified since the matter is confidential. Under the proposed deal, Vivendi and Mediaset are planning to swap stakes of less than 5 percent in each other, said the people. Since Vivendi’s market value is about six times higher than Mediaset’s, the Italian company will compensate the difference with the sale of a majority stake in the pay-TV business.

In 2014 Telefonica SA purchased 11 percent of Mediaset Premium for 100 million euros, giving the company an equity value of about 900 million euros ($1 billion). A Milan-based spokesman for Mediaset and a Vivendi representative declined to comment.

Mediaset, Italy’s biggest commercial TV broadcaster, has considered a sale or a partnership for Mediaset Premium because competition from Sky is hurting subscriber growth in Italy. Berlusconi, Mediaset’s founder and a former prime minister, is a long-time friend of Bollore.

Vivendi is executing a plan to build a media group around its French pay-TV station Canal Plus, seeking combinations to expand in video and music and distribution in southern Europe. Bollore has led the company’s push to acquire stakes in Telecom Italia SpA, Italy’s biggest phone carrier, as well as game makers Gameloft SE and Ubisoft Entertainment SA.

Italian daily MF reported Friday that Vivendi was close to a pact with Mediaset involving the pay-TV unit.

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