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Top EU court says curb on Vivendi's Mediaset stake breaches bloc's law

Stock MarketsSep 03, 2020 14:55
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© Reuters. FILE PHOTO: French media giant Vivendi logo in Paris

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.

Top EU court says curb on Vivendi's Mediaset stake breaches bloc's law
 

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