- A contentious legal battle between media giants Vivendi (OTCPK:VIVHY +0.8%) and Mediaset (OTCPK:MDIUY) is still likely to result in a pay TV transaction between the two, a CTFN report suggests, as the differences may amount to price.
- Vivendi had reached a deal to acquire Mediaset Premium, the pay TV operation of the Italian broadcaster, in April. But in late July, Vivendi decided to back out, sinking Mediaset shares and resulting in a lawsuit. Vivendi threatened a defamation suit as well.
- A source tells CTFN that they believe the suit's a strategy to force a new deal: “Mediaset Premium is burning more than €80 million cash a year. Mediaset wants to get rid of it before the end of the year so it does not have to include it in its 2016 financials."
- Vivendi said it was unwilling to take 100% of the operation, instead seeking about 20% of Mediaset Premium, then a 15% stake in parent Mediaset.
- A deal would be of a piece with Vivendi's recent moves (including its stake in Telecom Italia) to begin construction of a Southern Europe media platform strategy.