Vivendi Announces Plans to Raise Its Stake in Mediaset to 30%

Hostilities between Vincent Bollore’s Vivendi and Silvio Berlusconi’s Mediaset escalate yet further

Vincent Bollore Silvio Berlusconi

In a further escalation of hostilities between two European TV giants, Vincent Bollore’s Vivendi announced Monday that it was planning to raise its stake in Silvio Berlusconi’s Mediaset to 30% of shareholding and voting rights – the upper limit above which Vivendi would be legally obliged to launch a takeover bid.

In a dramatic move, the French media conglom raised its participation in Mediaset first to 3% and then 20% last week. Its new declaration of intent comes in reaction to a meeting this Friday between Arnaud de Puyfontaine and Piersilvio Berlusconi, the chief executives of Vivendi and Mediaset, and the position taken by Fininvest, the holding company through which the Berlusconi family controls 39.8% of Mediaset voting rights, Vivendi said in a statement Monday.

Also this Monday, Fininvest filed a complaint with Italian market regulator Consob, accusing Vivendi of market manipulation and abuse of information and calling on Consob to intervene in the conflict. Fininvest also announced that its lawyers had provided Milan prosecutors with the latest documents related to the case.

Vivendi said Monday that it would buy more Mediaset shares “depending on market conditions.”

Analysts suggest various interpretations for Vivendi’s dramatic share hike. One is an attempt to persuade Mediaset to nix a €1.5 billion ($1.56 billion) lawsuit against Vivendi, deriving from the collapse of an earlier partnership deal, signed in April, which gave Vivendi control of Mediaset’s pay TV unit.

Another explanation is that Bollore is seeking to exercise larger control over Mediaset leveraging a large minority stake and alliances with smaller shareholders. Vivendi itself claimed Monday evening that the “strategic interest” of an industrial partnership between Vivendi and Mediaset, broached by the April agreement, surpassed any conflict. Just how the two managements, currently at daggers drawn, could work together, however, is another question.