Rupert Murdoch’s News Corp. confirmed Thursday that it is in talks with Vivendi Universal to buy out Viv U’s Italian paybox Telepiu.
News Corp. said other options were also being mulled, including running its own Italo paybox Stream as an independent business or going ahead with its threat to take legal action against Viv U after it pulled out of a previous merger.
However, News Corp. denied French press reports that it offered Viv U more than $1.6 billion for Telepiu.
“We are in discussions with Vivendi and buying Telepiu is one option,” a News Corp. spokeswoman said.
Telecom Italia, which still owns a minority stake in Stream, has not commented but its management has repeated in the past its determination to exit the costly pay TV misadventure.
Buying Vivendi out of Italy is a turnaround in News Corp.’s Italian ambitions. It would also allow Messier to get out of a costly venture as he seeks to slash Viv U’s debt.
Viv U and News Corp. had planned to merge their Italian operations to stem huge losses and put a halt to a fierce and damaging battle for subscribers. But they pulled the deal when antitrust authorities looked set to reject it.
Viv U then agreed to buy News Corp.’s Stream but pulled out of that deal this month when authorities attached what were considered stringent conditions to the deal.
Murdoch threatened to sue Viv U but the two sides have since been in talks to find a solution.
In the meantime, Viv U plans to improve Telepiu’s operational performance through cost cuts and boosting income per subscriber. However, that could take time — something Messier can ill afford.
Italy’s minister for communications Maurizio Gasparri attempted to pour oil on the troubled waters of the Stream-Telepiu case the day before, saying, “We should very cautious commenting on the possibility of Rupert Murdoch acquiring Telepiu.”
(Cecilia Zecchinelli and Reuters contributed to this report.)