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Mediaset and Vivendi Fail to Settle Feud Over Dutch Merger

Daniele Lepido and Angelina Rascouet

(Bloomberg) -- Mediaset SpA and its second-biggest shareholder failed to settle a legal dispute that has cast doubt over the Italian company’s plan for a European broadcasting tie-up.

Vivendi SA had offered to sell most of its 29% stake in Mediaset and stop trying to block a merger of Mediaset’s Italian and Spanish units into a new Dutch holding company, according to people familiar with the talks.

In the end, Mediaset didn’t get enough guarantees that Vivendi won’t interfere in its future plans or try to rebuild its stake in the company, said the people, who asked not to be identified as the deliberations are private. They were also unable to agree a price for Vivendi’s shares, they said.

Mediaset confirmed the failure of the talks in a statement. Its shares closed down 1.6% in Milan.

Vivendi, controlled by French billionaire Vincent Bollore, sees the Dutch plan as a tactic to cement the control of Mediaset’s dominant shareholder, the Berlusconi family. Mediaset management wants the new company to form the basis of an alliance among European broadcasters to counter the growing power of U.S. streaming giants.

The companies were trying to reach a deal by Friday afternoon, when a Milan court was due to consider Vivendi’s request to suspend Mediaset shareholders’ approval of the Dutch plan.

The hearing began at 3:30 p.m. local time and wrapped up after an hour, with Judge Elena Riva Crugnola saying she would rule on the matter at a later date.

The companies may decide to resume the talks, the people said.

Representatives for Mediaset and Vivendi declined to comment.

The companies have been embroiled in legal battles since Vivendi walked away from a deal to buy a pay-TV business from Mediaset in 2016 over a disagreement about the unit’s value. Vivendi proceeded to build a large position in Mediaset, angering Italy’s political and business establishment, which was concerned about the French company’s growing influence in the country’s media industry.

There was speculation that an agreement may be near after Mediaset said last week it would ask shareholders on Jan. 10 to back changes to company bylaws sought by Vivendi and requested by the Milan court.

Mediaset said on Friday the January shareholder meeting would still go ahead.

(Adds more on Dutch dispute in fifth paragraph)

To contact the reporters on this story: Daniele Lepido in Milan at dlepido1@bloomberg.net;Angelina Rascouet in London at arascouet1@bloomberg.net

To contact the editors responsible for this story: Rebecca Penty at rpenty@bloomberg.net, Thomas Pfeiffer, Eric Pfanner

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