Vivendi Changes Terms, Puts Mediaset Pay-TV Deal in Doubt
The French media giant said it saw "significant differences" in the financial projections from Silvio Burlusconi's Mediaset.
In an abrupt u-turn, French media giant Vivendi changed the terms reached in April of its offer to Italy’s Mediaset, the companies revealed Tuesday.
In what it called an “alternative structure,” Vivendi wants only 20 percent of the pay-TV arm, Mediaset Premium, and 3.5 percent of the parent company.
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 the new offer “would fully align the interest of the respective groups” while “enable[ing] synergies between pay and free TV activites within the Mediaset group.”
Mediaset countered with a terse statement, saying that Vivendi “does not intend to respect the binding contract signed with Mediaset.”
Vivendi said it had “significant differences” with Mediaset’s analysis of the value of their pay-TV business, leading to the lower offer.
The Italian company said Vivendi CEO Arnaud de Puyfontaine verbally reversed the company's position yesterday, indicating that "Vivendi does not intend to honor the binding agreement signed."
De Puyfontaine is the right hand of Vivendi chair Vincent Bollore, who has been transforming the former French telecoms company into an international media and content giant. But Bollore has also taken a controversial slash and burn policy towards the CanalPlus flagship channel with a rash of hirings and firings, as well as instituting a hostile takeover of game company Gameloft and beginning a second one that is currently in process at Ubisoft.
Vivendi countered that the new position was an attempt to continue discussions and said that it wants to build a strategic alliance with Mediaset.
The alliance has been seen as a way for Vivendi to increase its strength in southern Europe and to set itself up as a direct competitor to Rupert Murdoch’s U.K.-based Sky.
“For Mediaset, Vivendi’s new position comes absolutely out of the blue and was not agree to in any way. It is, moreover, in clear contradiction with the commitments made by Vivendi in the contract signed on April 8,” the statement continued.
The Mediaset board of directors is set to meet on July 28, and will address the proposal that is currently on the table, but made it clear it is not feeling favorable towards the new terms at this time.
The new terms change “the industrial rationale underlying the agreement," Mediaset said, adding: “Mediaset is absolutely determined to assert and protect its rights and interests in any appropriate manner and place."