Fininvest eyes Telecom Italia to end Vivendi dispute

The Berlusconi family’s investment firm could take a stake in Telecom Italia as part of a plan to settle a dispute with French media company Vivendi, Il Messaggero newspaper said on Wednesday, citing advisers.

Berlusconi’s Fininvest, the biggest shareholder in Italian broadcaster Mediaset, has been at loggerheads with Vivendi since July 2016 when the French company pulled out of an agreement to buy Mediaset’s pay-TV business Premium.

Vivendi, whose chairman and biggest shareholder is Vincent Bollore, has since built up a 28.8% stake in Mediaset, a move that has angered Fininvest, riled the Italian government and unleashed lawsuits.

Vivendi, which owns French TV channel Canal Plus and Universal Music, is also the biggest investor in Telecom Italia with a 24.9% stake and the government is worried that Bollore could end up with too much influence in corporate Italy.

Il Messaggero said the proposal to bury the hatchet would involve Vivendi cutting its Mediaset stake to 9.9% and selling 9.9% of Telecom Italia to Fininvest. In addition, Vivendi would get two seats on Mediaset’s board and Fininvest two on Telecom Italia’s, the paper reported, adding the overall proposal appealed to former prime minister Silvio Berlusconi.

Vivendi and Mediaset declined to comment.

Vivendi’s stakebuilding has raised questions about Bollore’s intentions and whether these include a future combination of Mediaset with Telecom Italia, which has made distribution of content via broadband a growth priority. Italy’s antitrust regulations prevent companies from having an excessive exposure to both telecom and media and Vivendi’s Mediaset move is the subject of an inquiry.

Any cross shareholding between Mediaset and Telecom Italia would be likely to prompt alarm bells in government circles and analysts said the plan outlined in Il Messaggero would be difficult to implement.

Two sources close to the matter said that the idea of Fininvest buying Telecom Italia shares was never on the table. Mediaset CEO Pier Silvio Berlusconi said in January he was not interested in a stake in Telecom Italia as part of a broader Vivendi deal.

One of the sources said that any decision on the dispute between the two groups had been suspended anyway pending an inquiry by Italian communications regulator Agcom into Vivendi’s stakebuilding at Mediaset. “In any case, if Vivendi has to make a choice between Mediaset and Telecom Italia, it will choose to keep Telecom Italia shares,” the person said.

One analyst said it would be hard for Vivendi to place 18% of Mediaset at market prices and doubted the French firm would be willing to sell at a loss.

There was little market reaction to the report with Vivendi down 0.2% at 12.18pm GMT, Mediaset down 0.5% and Telecom Italia up 1.2%.