Mediaset takes MediaForEurope battle with Vivendi to regulator

Mediaset has taken its battle with shareholder Vivendi to Italian markets regulator CONSOB with a complaint that the French media giant was attempting to manipulate Mediaset’s share price downwards.

Mediaset referred specifically to a report published by Bloomberg this week, citing unnamed sources, that indicated that Vivendi was prepared to vote against the Italian media company’s plan to merge with Mediaset España and create a new Europe-wide holding company based in the Netherlands.

The media group also referred to a report on the gossip site Dagospia that Vivendi would take any measure necessary to block the merger, including legal action as well as attempting to convince minority shareholders that it is not in their interest.

Mediaset has accused Vivendi of unlawful share price manipulation in order to make the deal more difficult to achieve as well as discrediting the rationale behind it.

The Italian group had previously accused Vivendi of pulling out of the aborted 2016 strategic agreement between the pair specifically to damage Mediaset and drive down its share price in order to acquire shares in the company on the open market.

The complaint filed to CONSOB has also been sent to communications regulator AGCOM, which is tasked with monitoring Vivendi’s compliance or non-compliance with the TUSMAR rule that prevents companies from simultaneously holding stakes in media and telecommunications firms in Italy. Vivendi passed the bulk of its shares in Mediaset to a trust in order to comply with the rule as it is also the biggest shareholder in Telecom Italia.

It is unclear whether Vivendi can muster enough support to block the Mediaset España merger and the creation of the new holding company, MediaForEurope, when Mediaset shareholders meet on September 4. Blocking the deal would require a two thirds merger, and Vivendi holds a 9.6% stake in the broadcaster directly, with a further 20% held by Simon Fiducaria as an independent trust to meet Italy’s TUSMAR rule that prevents entities from simultaneously holding large stakes in media and telecom companies.

Vivendi has secured the support of one other group, proxy advisor firm ISS, which has concerns about the corporate governance implications of the deal. Other shareholders have indicated that they support the new structure on the ground that it would build value.

If Mediaset’s plans secure a green light from shareholders, Vivendi and other shareholders will have to decide whether to tender their shares to MediaForEurope or sell out. Mediaset has only offered €2.77 per share to stockholders that don’t want to participate, which is below the current price of the company’s shares.