Mediaset denies it received letter from Vivendi on alliance in Europe

Mediaset MS.MI denied a media report on Thursday saying the Italian broadcaster had received a letter from the board of France’s Vivendi VIV.PA proposing an alliance in Europe to settle a long-standing dispute between the two.

Italian daily MF reported that Vivendi, the broadcaster’s second-largest shareholder, sent a letter to Mediaset’s board proposing the creation of a 50-50 European TV joint venture with Mediaset.

The two companies have been locked in a fight since 2016 when Vivendi ditched an agreement to buy Mediaset’s pay-TV unit and built a 29% stake which Mediaset considers hostile. A legal case has been ongoing ever since.

“Mediaset’s board has not received any letter from Vivendi’s board to form an alliance in Europe”, the Milan-based group said in a statement, adding that the board would be ready to evaluate any such proposal.

Vivendi had no immediate comment.

Mediaset and Vivendi resumed talks in September to work out a potential solution to the long-running legal row and revive the Italian broadcaster’s European growth strategy, sources have said.

No breakthrough has been reached up to now and the uncertainty created by the coronavirus pandemic has complicated matters, the people said.

Mediaset, which is controlled by the family of former Italian prime minister Silvio Berlusconi, has been targeting expansion in Europe to cope with stiffer competition in the industry from streaming services such as Netflix NFLX.O.

But Vivendi’s opposition has forced Mediaset to freeze plans to create a Dutch holding company to pursue its European growth strategy, saying the governance structure of the new entity would increase Berlusconi’s grip on the group.

Mediaset shares were down 2.1% by 1240 GMT against a 0.2% fall in Italy’s all-share index .FTITLMS. Reuters