MILAN, Italy – Mediaset, the biggest commercial broadcast company in Italy, holds a meeting with its shareholders on Friday to talk about the needed governance changes to allow its plans for the company’s pan-European expansion.
The pan-European expansion plan of Mediaset is something that Vivendi, the second-largest investor in the country, is trying to fight against in court.
Mediaset and Vivendi have been in a prolonged dispute for a couple of years ago. The clash started in April 2016 when Vivendi has agreed to purchase the pay-TV business of Mediaset. The purchase was considered as a major step in the plan of Vincent Bollore, a billionaire businessman, to build a video-on-demand and content powerhouse in the southern part of Europe. During the agreement, Mediaset and Vivendi have agreed to get a 3.5% stake in each company.
However, in July 2016, Vivendi decided to back away from its original deal with Mediaset. Instead, it proposed an alternative agreement that would provide a bigger direct stake in Mediaset. From its previous statements, Vivendi cited the unreliability in the financial forecasts of Mediaset Premium for 2016 to 2018 as the main reason for their change of mind.
Since then, there has been a brewing tension between the two powerhouses. It further escalated when Mediaset rejects the alternative proposal from Vivendi and later on made a statement that it will pursue legal action against the French investor.
In December 2016, the French group builds a 28.8% stake in the Italian broadcaster, which was then condemned by Mediaset.
The tension between the two companies went on to the following year and in April 2017, the communications watchdog, a Telecom Italia’s top shareholder, ordered Vivendi to cut its stake in Mediaset or the telecoms group within the year in line with the designed rules to help prevent its power concentration.
The legal battle continued from there and even went on to Mediaset requesting three billion euros for damages over the botched pay-TV deal.
In September 2019, the Italian broadcaster’s shareholders planned to build a pan-European media group to help fend off opposition they are getting from Vivendi. Meanwhile, Vivendi challenges this plan in court in both Italy and Spain.
In October 2019, the corporate overhaul by Mediaset was suspended by a Spanish court, ruling in favor of the French group, in which Mediaset tried for an appeal.
In November, both firms failed to finalize a deal by the deadline imposed by the court. And in December, a court in Milan postponed its decision to the suspension request of Vivendi against the broadcaster’s corporate overhaul. The decision is suspended until January 21 at the earliest.
The market awaits on any new headline following the Friday’s Mediaset shareholder meeting.