The original terms would have seen Vivendi fully acquire Mediaset’s pay-TV business and the two companies take a 3.5 percent stake in each other. Vivendi said it is still interested in building a strategic alliance.
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Vivendi, which had agreed in April to buy full control of Mediaset Premium as part of a broader alliance that involves a 3.5 percent stake swap between the two companies, now proposes to purchase just 20 percent of the pay-TV unit and to increase its stake in Mediaset to 15 percent in three years with a mandatory convertible bond, Mediaset said in a statement Tuesday.
Mediaset shares fell sharply on the news.
“The move by Vivendi wants to put the Berlusconi family in the corner, and force them to give up the control of Mediaset, at a time when Berlusconi is selling off several assets of his empire”, one Milan-based media analyst said.
France’s Vivendi (VIVEF) pulled the plug on plans to buy the pay-TV operations of Italy’s Mediaset (MDIEF) on Tuesday, claiming due diligence had revealed discrepancies in the target’s valuation and forced a rethink that led to it seek a bigger stake in Mediaset itself.
In a statement, Vivendi said that Chief Executive Arnaud de Puyfontaine sent a letter to Mediaset’s management on June 21 informing the Italian company of “significant differences in the analysis” of Mediaset Premium’s results.
De Puyfontaine is the right hand of Vivendi chair Vincent Bollore, who has been transforming the former French telecoms company into an global media and content giant.
Vivendi countered that the new position was an attempt to continue discussions and said that it wants to build a strategic alliance with Mediaset.
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He said Mediaset’s advertising revenues in the first six months of the year would be up nearly 4 percent, and would rise 2 percent at the end of 2016. “It is, moreover, in clear contradiction with the commitments made by Vivendi in the contract signed on 8 April”.
