Top EU court says curb on Vivendi's Mediaset stake breaches bloc's law
Reuters
Published Sep 03, 2020 14:51
By Elvira Pollina and Marine Strauss
BRUSSELS/MILAN (Reuters) - The European Union's top court ruled on Thursday that an Italian law that forced French Vivendi (PA:VIV) to forfeit two thirds of its 29% stake in Italian broadcaster Mediaset (MI:MS) violates the bloc's rules.
The Court of Justice ruling could strengthen Vivendi's hand in a long-running dispute, helping it regain voting rights for its full stake in Mediaset, 44% owned by the family of Italy's former Prime Minister Silvio Berlusconi.
Mediaset shares rallied up to 5% after the news as investors speculated over possible new M&A scenarios for the Italian broadcaster stemming from the court decision, a Milan-based trader said.
Vivendi, led by French billionaire Vincent Bollore, has been embroiled in a legal dispute with Mediaset since it withdrew from a deal to buy the Italian group's pay TV unit in 2016 and built up a stake which Mediaset considers hostile.
Vivendi's U-turn on the pay TV sale, widely seen as a first step to build closer ties between the two groups to build a Southern-European media powerhouse, prompted a multi-billion euro damage request. A legal case has been ongoing ever since.
In 2017 Italy's communications watchdog ruled Vivendi's stakes in Mediaset and Italy's biggest phone group Telecom Italia (MI:TLIT) broke rules designed to prevent a concentration of power in the telecoms and media sectors and ordered it to reduce one of its holdings to below 10%.
Vivendi challenged the communications regulator's decision in an Italian court, which referred the case to the EU court.
To comply with the Italian regulator's request, the French group transferred two-thirds of its voting rights in Mediaset into an arm's-length trust, which has been barred from voting at the Italian group's shareholder meetings.
This year Vivendi succeeded in blocking in the courts a Mediaset plan to merge its domestic and Spanish (MC:TL5) units under a Dutch holding company with a view to forging tie-ups with other European peers and taking on increasing competition from streaming services like Netflix (O:NFLX).
Attempts to clinch a wider settlement and break the stalemate have so far proved unsuccessful.
Mediaset and Vivendi declined to comment on Thursday's ruling.
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Written By: Reuters
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