Vivendi-Mediaset battle heats up after Italy regulator crackdown

An ongoing battle between French media giant Vivendi and Italy's Mediaset heated up Wednesday after Italy's telecoms authority ruled the group led by Vincent Bollore violated an Italian law banning the excessive concentration of media properties in the hands of a single owner.

In a statement issued late Tuesday, Italy's Communications Guarantees Authority (AgCom) said Vivendi owns too many shares in two similar companies - Telecom Italia S.p.A. and Mediaset S.p.A. - and gave it 12 months to reduce its position in one or both Italian firms.

The French company - which according to its website, currently holds 23.94 percent of Telecom Italia and 28.8 percent of Mediaset - expressed "astonishment" at the AgCom ruling and said it "reserves the right to bring legal action".

This might include an appeal to an Italian Regional Administrative Tribunal (TAR) and a formal complaint with the European Commission for violation of EU law, Vivendi said.

"Vivendi does not control nor does it exercise a dominant influence on Mediaset, which is controlled exclusively by Fininvest with a close to 40 percent stake," the French conglomerate, which also owns Universal Music Group, Canal+ pay TV, and Gameloft games developer, said in a statement.

The AgCom decision plays in favor of Mediaset, which is majority owned by Fininvest, the family holding company of former Italian prime minister and ex-AC Milan owner Silvio Berlusconi.

Fininvest and Vivendi have been tussling since a deal between the two went sour in late July last year, when the French company backed out of an agreement to purchase Mediaset's pay TV subsidiary, Mediaset Premium.

Fininvest sued for completion of the deal, even as Mediaset share price tumbled from a high of just over 3.4 euros a share in mid-July to a low of 2.24 euros a share at the end of November.

Vivendi went on a buying spree in mid-December, increasing its stake in Mediaset to just under 30 percent.

Fininvest filed a criminal complaint, following which Milan prosecutors placed Vivendi's chairman, Vincent Bollore, and chief executive, Arnaud de Puyfontaine, under investigation for market manipulation. Vivendi called that prosecution move "the result of an unfounded and abusive lawsuit".

Fininvest, which also owns Medusa film production company and Mondadori publishers, holds 38.3 percent of Mediaset.

On Wednesday afternoon, shares in Mediaset were trading down -1.89 percent at around 3.4 euros a share on the Italian stock market. (1 euro = 1.07 U.S. dollars) Endit