Mediaset Files Complaint Against Vivendi Over Disputed TV Deal

Updated on
  • Urges French regulator to demand Vivendi correct statements
  • Companies at odds after Vivendi pulls out of deal to buy unit

Mediaset SpA, the Italian broadcaster controlled by former Prime Minister Silvio Berlusconi, sought the help of the French stock-market regulator in its dispute with media company Vivendi SA over a failed sale of its Premium pay-TV business.

The Italian company filed a complaint with the watchdog, urging it to order Vivendi to correct public statements it has made about the disputed deal, according to a letter dated Sept. 7 and seen by Bloomberg News. In the latest salvo between the media companies, Mediaset accused Vivendi of publicly giving misleading information about the terms of the transaction, valued at about 900 million euros ($1 billion).

Support from French regulators could provide Mediaset with ammunition in its case against Vivendi. The two are at odds after Vivendi pulled out of a deal to buy all of Mediaset’s pay-TV unit in July, resulting in Mediaset filing legal action and estimating its damages at more than 1.5 billion euros.

In its latest earnings release, Vivendi stated that the pay-TV deal was subject to a due diligence review, a claim Mediaset says isn’t correct. Mediaset is asking the regulator, AMF, to take “all proper measures” to make Vivendi change its statement, according to the letter.

AMF can start an inquiry, or it may decide to not react as it doesn’t have an obligation to accept and process complaints, according to a person familiar with such situations. After a potential inquiry, AMF may decide to reprimand the company and levy sanctions, the person said. The regulator focuses on the accuracy of financial communication, and wouldn’t give an opinion on the dispute itself, the person said.

An AMF representative confirmed the regulator has received the complaint, declining to comment further on the case. Representatives for Vivendi and Mediaset declined to comment.

Vivendi agreed in April to buy full control of the pay-TV business Mediaset Premium as part of a broader alliance that involved a 3.5 percent stake swap between the two companies. It pulled out of the deal three months later, submitting a new proposal because of "significant differences" with Mediaset in analyzing the pay-TV unit’s results.

Mediaset rejected the new offer, in which Vivendi proposed it buys just 20 percent of the pay-TV unit, and increases its stake in Mediaset to 15 percent in three years with a mandatory convertible bond.

While Mediaset has suggested Vivendi was plotting a takeover, Vivendi insists it only backed out of the deal because Mediaset’s financial projections for the loss-making pay-TV unit had proved to be unrealistic.

Mediaset, Italy’s biggest commercial TV broadcaster, had considered a sale or a partnership for Mediaset Premium because competition from Rupert Murdoch’s Sky Plc is hurting subscriber growth in Italy. Berlusconi, the company’s founder, is also a longtime friend of Vivendi Chairman Vincent Bollore.

Shares of Mediaset declined 0.8 percent to 2.93 euros at 3:51 p.m. in Milan. Vivendi fell 0.8 percent to 17.88 euros in Paris.