Vivendi Seeks to Increase Stake in Italy's Mediaset to 30% -- Update
December 19 2016 - 4:39PM
Dow Jones News
By Nick Kostov
PARIS -- Vivendi SA Chairman Vincent Bolloré dramatically raised
the stakes in his showdown with Silvio Berlusconi, threatening to
increase Vivendi's stake in Mediaset SpA to a level that would set
off a bare-knuckled battle for control of the Italian TV company
founded by the former Italian prime minister.
Vivendi, the French film, TV, telecoms and videogame giant, said
it was ready to buy up to 30% in Mediaset SpA -- the legal
threshold before an investor is required to launch a takeover offer
for all shares outstanding.
Vivendi, has been snapping up shares in Mediaset at a steady
clip. Last week, after a long-running contractual dispute over a
failed partnership between the two media giants, Vivendi started
buying up Mediaset shares, spending EUR800 million ($860 million)
to build a 20% stake.
A further stake increase by Vivendi significantly raises the
ante on the Berlusconi family in its battle retain control of the
company. Italian law restricts the family from quickly raising its
stake by more than 5% each year without launching its own offer for
all shares outstanding.
Fininvest, the family holding company, recently raised its
ownership to 38.3% of Mediaset from 35% in response to Vivendi's
advances. As a result, the family can't buy any more shares until
April, and then can only raise its stake another 2 percentage
points.
Mr. Bollore also has a reputation for creeping takeovers,
gradually accumulating large stakes in companies that allow him to
call the shots in the boardroom without making an actual takeover
bid.
Fininvest said earlier on Monday that it had filed a market
abuse complaint against France's Vivendi with national market
authority Consob. It had already lodged a criminal complaint in
Milan against the French company for market manipulation last
week.
In a statement, Fininvest said that "Vivendi continues with a
very aggressive strategy" that confirms the irregularities already
set out by Fininvest. The Berlusconi family holding added that more
legal action would follow.
Vivendi's latest maneuvering defies warnings from the Italian
government who lamented the "hostile" stake-building. The purchases
also provide Vivendi with more leverage in a key contract dispute
with Mediaset that started the conflict.
Eight months ago, the two companies signed a cross-shareholding
agreement that would allow Mr. Bolloré to further expand his empire
into Italy by acquiring Mediaset's pay TV business. Vivendi has
been on an acquisition binge aimed at building a media empire
focused in southern Europe. But the deal fell apart after Vivendi
soured on the value of the pay-TV unit.
Mediaset filed a lawsuit demanding that an Italian court enforce
its agreement with Vivendi for the sale. On Friday, Chief Executive
Arnaud de Puyfontaine and his counterpart at Mediaset's Chief
Executive Pier Silvio Berlusconi, Mr. Berlusconi's son, met for 15
minutes in Milan.
In that meeting, Mr. Berlusconi refused to withdraw the lawsuit,
saying "not before we get the damage compensation" for not
respecting the contract, according to a person close to
Mediaset.
A person close to Vivendi said that Mediaset isn't making any
effort to resolve the conflict. "All the time, it's very
bellicose," the person said.
Manuela Mesco contributed to this article.
Write to Nick Kostov at Nick.Kostov@wsj.com
(END) Dow Jones Newswires
December 19, 2016 16:24 ET (21:24 GMT)
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