By Mauro Orru
French media giant Vivendi SE and Italian broadcaster Mediaset
SpA have been feuding since 2016, when Vivendi backed out of a deal
to acquire Mediaset's pay-TV unit Mediaset Premium, prompting a
series of legal battles.
The latest twist in the saga came on Monday, when a Milan court
ordered Vivendi to pay Mediaset around 1.7 million euros ($2
million) in compensation. Mediaset plans to appeal for more.
Vivendi has been ramping up its stake in Mediaset since November
2016, reaching the 28.8% stake it currently owns by the end of
Mediaset--controlled by the family of former Italian Prime
Minister Silvio Berlusconi--considers the stake build-up a hostile
move by Vivendi and has been seeking to overturn it.
After the Mediaset Premium deal collapsed, Mediaset sought to
merge its Italian arm with its Spanish operations--Mediaset Espana
Comunicacion SA--to create a pan-European media holding company to
be called MediaForEurope NV.
However, Vivendi opposed the plan, saying it disregarded basic
shareholders' rights. This triggered a long-running legal battle
across several jurisdictions in the European Union, causing
Mediaset to shelve and reassess its plans.
April 2016: The two companies entered into a binding agreement
for Vivendi to acquire Mediaset's pay-TV unit Mediaset Premium,
with both agreeing to take a 3.5% stake in each other's share
July 2016: Vivendi's Chief Executive Arnaud de Puyfontaine told
Mediaset there were significant differences in the analysis of
Mediaset Premium results.
Vivendi then proposed an alternative structure to buy a 20%
stake in Mediaset Premium and 3.5% in Mediaset in exchange for a
3.5% stake in Vivendi. Convertible bonds would also be issued by
Mediaset to Vivendi in instalments for the remaining amount,
Vivendi said at the time.
Mediaset said Vivendi's new position came "out of the blue," and
was "in clear contradiction with the commitments made by Vivendi in
the contract signed" in April 2016. Mediaset said it would adopt
all necessary measures to ensure the respect for the original
contract terms, including legal action.
August 2016: Mediaset filed a suit with a court in Milan "aimed
at ensuring the mandatory respect of the contract with judicial
backing and the payment of damages sustained to date by
Mediaset's majority shareholder Fininvest SpA, the holding
company controlled by the family of Mr. Berlusconi, filed a summons
claiming at least EUR570 million in damages, citing a decrease in
the value of Mediaset shares since the deal collapsed. At the first
hearing, the judge urged the companies to try and reach an amicable
resolution. Mediation proceedings started before the Chamber of
National and International Arbitration of Milan in May 2017.
December 2016: Vivendi started building up a stake in Mediaset
in November 2016, crossing the 3% threshold in early December, and
reaching 28.8% by the end of December 2016.
April 2017: The Italian communication authority, Agcom, ruled
that Vivendi's stakes in Mediaset and Telecom Italia SpA were in
breach of the "Gasparri" law, which concerns the protection of
media pluralism in Italy. Vivendi reserved the right to take legal
action, including filing an appeal to a regional administrative
court in Italy and submitting a complaint to the European
June 2017: Mediaset and Fininvest filed a further complaint
against Vivendi seeking damages of EUR2 billion for Mediaset and
EUR1 billion for Fininvest.
April 2018: Agcom said Vivendi transferred a 19.19% stake in
Mediaset to asset trust Simon Fiduciaria SpA, complying with the
Italian regulator's decision from 2017.
June 2018: Mediaset's board agreed that Simon Fiduciaria
couldn't exercise its voting rights at its shareholders' meeting.
The company said Vivendi couldn't exercise its rights for the
shares owned by the asset trust since they were "acquired in
violation" of commitments in the 2016 contract.
October 2018: Mediaset received a legal challenge from Simon
Fiduciaria, which claimed the right to take part in shareholder
November 2018: A court in Milan rejected the legal challenge
brought by Simon Fiduciaria, which said it would appeal. The appeal
was rejected in January 2019.
December 2018: Mediaset and Fininvest pursued their claim for
compensation for alleged damages of up to EUR720 million for
Mediaset and EUR1.3 billion for Fininvest. Fininvest also sought
damages for an amount to be determined by the court for damages to
its decision-making process and reputation.
March 2019: Vivendi requested the suspension for part of the
proceedings with Mediaset and Fininvest pending the ruling of the
European Court of Justice on the compatibility of the Italian law
on the protection of media pluralism due in September 2020.
April 2019: Mediaset reasserted that Vivendi and Simon
Fiduciaria weren't legally entitled to exercise their
administrative rights, including voting rights.
June 2019: Mediaset confirmed its intention to create a
pan-European television hub, MediaForEurope, to be based in the
Netherlands, with its tax base in Italy and listed on the Italian
and Spanish stock exchanges. The new vehicle was meant to control
100% of Mediaset and 100% of its Spanish subsidiary as well as a
9.6% stake in German broadcaster ProSiebenSat.1 Media SE which
Mediaset had recently acquired.
August 2019: Vivendi filed a request with a Milan court to issue
an order to preserve its right to attend Mediaset's extraordinary
shareholders meeting on Sept. 4, 2019 and exercise its voting
rights. The court confirmed Vivendi's right to attend and vote as a
shareholder with a 9.9% stake, but prohibited Simon Fiduciaria's
participation. Vivendi said it would vote against the proposed
creation of MediaForEurope.
September 2019: Mediaset shareholders backed the proposed merger
of Mediaset's Italian and Spanish operations to create
MediaForEurope. Vivendi brought summary proceedings before the
Madrid Commercial Court requesting the suspension of the resolution
for the creation of MediaForEurope.
October 2019: Mediaset received notification of a preliminary
injunction from Vivendi to block the creation of MediaForEurope as
the French company argued the plan disregarded shareholders' rights
and would only benefit Mediaset's largest shareholder, Fininvest.
Mediaset filed an appeal for the Madrid court decision but the
court dismissed this in February 2020.
January 2020: Mediaset shareholders backed amendments to the
articles of association of MediaForEurope as well as terms and
conditions for special voting shares to be issued for the planned
merger. Vivendi said it "deplores today's irregular approval."
"The new plan has only gained approval because of the unlawful
refusal to allow Simon Fiduciaria to vote, relying on an
interpretation of the Italian media law which is contrary to the EU
Treaty," Vivendi said. Vivendi launched proceedings in the
Netherlands to stop the creation of MediaForEurope.
February 2020: A Milan court rejected requests from Vivendi and
Simon Fiduciaria to suspend the creation of MediaForEurope, but
Vivendi vowed to appeal. Later in February, a court in Amsterdam
ruled in favor of the creation of MediaForEurope, in a defeat for
Vivendi. Vivendi said it would also appeal the decision in the
June 2020: A Milan court rejected appeals from Vivendi and Simon
Fiduciaria against Mediaset's plan to create MediaForEurope. Judges
found Vivendi acted not as a partner but as a competitor in
opposing the project.
August 2020: Mediaset said it would evaluate alternative options
to create a pan-European media holding company, after a Spanish
court granted a request by Vivendi to suspend the original plan.
The court's decision meant the plan as deliberated in June 2019
couldn't be completed as planned by Oct. 2, 2020.
September 2020: An Amsterdam court suspended the planned merger
of Mediaset's Italian and Spanish operations to create
MediaForEurope. Mediaset said it might consider new business
opportunities in the telecommunications sector "if there were to be
the possibility for convergence" for players in telecommunications
Meanwhile, the European Court of Justice ruled that the
"Gasparri" law restricting Vivendi's shareholding in Mediaset was
contrary to EU law.
December 2020: Vivendi said: "Italian authorities have been
seeking to circumvent the European Court of Justice judgment
through the enactment of an emergency measure that is supposed to
introduce retroactively the new restrictions on Vivendi's
Consequently, Vivendi lodged a complaint to the European
Commission against the Italian law provision restricting its
shareholder rights in Mediaset.
The announcement came after media reports about the conclusion
of an investigation by Milan prosecutors alleging that Vivendi
communicated incorrect information to the market and withheld
information from Italian securities regulator Consob as it built up
its Mediaset stake in 2016.
Vivendi said it acquired its stake in Mediaset in compliance
with all applicable laws.
April 2021: A court in Milan ruled that Vivendi was in serious
breach of contract over the 2016 Mediaset Premium deal, ordering
the French company to pay Mediaset around EUR1.7 million in
compensation, much lower than the multibillion-euro sum sought by
Mediaset and Fininvest. Mediaset said it would appeal the
quantification of damages.
Write to Mauro Orru at firstname.lastname@example.org; @MauroOrru94
(END) Dow Jones Newswires
April 21, 2021 05:16 ET (09:16 GMT)
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