Vivendi Said to Mull Offer to Settle Mediaset Pay-TV Dispute

Updated on
  • Cash, stock package could reach range of $1.2 billion
  • Premium pay-TV unit could join Vivendi-Telecom Italia venture

Vivendi SA is considering making a settlement offer that includes cash and stock to resolve its year-long dispute over a failed pay-TV deal with the Berlusconi family’s broadcaster Mediaset SpA, according to people familiar with the discussions.

The French media conglomerate, led by billionaire Chairman Vincent Bollore, is considering giving Mediaset a compensation package that may be valued in the range of 1 billion euros ($1.2 billion), said the people, who asked not to be named discussing private talks. Mediaset’s Premium pay-TV channel, the asset at the center of the original deal that fell apart last year, could become part of a joint venture between Vivendi’s Canal Plus and Telecom Italia Spa, they said.

A formal offer has not been made and the sides are still discussing a settlement, the people said. Vivendi seeks to reach an agreement by early November, one of the people said.

Mediaset shares rose as much as 5.3 percent, reversing earlier losses. They closed up 1.8 percent to 3.20 euros in Milan, giving the company a market value of 3.8 billion euros. Vivendi advanced 0.2 percent to 21.33 euros in Paris.

A reconciliation would advance efforts at both media companies to respond to a rapidly changing television marketplace and restore some element of cooperation after more than a year of bitter feuding. In July 2016, Vivendi reneged on an agreement to acquire Premium in a share swap valued at about 800 million euros, setting off lawsuits, an unsolicited Vivendi purchase of Mediaset stock, and regulatory intervention.

Representatives of Vivendi and Mediaset declined to comment on the discussions. Bloomberg News reported last month that Vivendi was considering offering Premium a place in the TV venture with Telecom Italia.

Mediaset and Vivendi, like other traditional television companies, face rising costs for premium sports content like Premier League soccer and competition for viewers from Netflix Inc. and Inc. Bollore wants to use Vivendi, owner of pay-TV network Canal Plus and ad agency Havas, into a southern European media giant champion that can compete better in an online world.

The French billionaire’s has hit obstacles in Italy, where he’s battled Berlusconi as well as regulators. Vivendi, which accumulated about 29 percent of Mediaset stock in the last year, was forced by Italian regulators to transfer about 20 percent of its holding to an independent trust. Last week, authorities searched the company’s offices in Paris as part of a probe into the purchases.

At Telecom Italia, Vivendi is firmly in control after a period of conflict and management turmoil. The companies are working on a venture to buy pay-TV rights and co-produce series and films.

Berlusconi, 81, has been seeking 3 billion euros in damages in a Milan court, and while the terms being discussed fall short of that amount, the former premier would be freed of a potentially long legal tussle and instead be able to expand his business.

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