Mediaset and Vivendi in war of words

The war of words between Mediaset and Vivendi over the latter’s second thoughts about buying the Italian broadcaster’s struggling pay TV unit shows no signs of abating.

Mediaset on Friday accused Vivendi of being in breach of trading rules by releasing what it described as “totally subjective” information about the company’s performance during normal trading hours that potentially could have a detrimental impact on Mediaset’s stock price.

The company said that Vivendi would “have to answer” for the damage it had caused in civil and – possibly – criminal proceedings.

Mediaset’s statement followed Vivendi’s issuing of a press release in response to the Italian broadcaster’s rejection of its revised proposal to take a smaller stake in Mediaset Premium than that envisaged by the pair’s April 8 agreement.

In its press release, Vivendi said that Mediaset’s forecasts were based on “unrealistic assumptions”, citing a study it had commissioned from Deloitte that was completed after the initial deal was signed.

Mediaset said that its business plan was given to Vivendi in March, along with the assumptions on which it was based, including confidential material. It said that analysis of this material contributed in a significant way to the terms and conditions in the deal the pair signed in April.

While some observers have speculated that the pair will eventually find an agreement, despite the combative rhetoric, Vivendi CEO Arnaud de Puyfontaine has upped the ante by telling the UK’s Financial Times and France’s Les Echos that Vivendi had other possible partners to fulfill its ambitions in Italy.

De Puyfontaine told the Financial Times that Vivendi had other options and accused the Italian company of making a range of assertions that were wrong and unacceptable. He said that Mediaset’s projections were overly optimistic and compared the results of Vivendi’s analysis to discovering it had been sold “a Fiat Punto” when it had been promised a Ferrari.

In his interview with Les Echos, De Puyfontaine denied that Vivendi and Mediaset had “burned the bridges” that could have led to a possible deal. He again cited the Deloitte report as evidence that Mediaset’s plan, as communicated to Vivendi ahead of the April deal, was unrealistic. De Puyfontaine said that Vivendi’s management had “numerous discussions” on the topic with Mediaset and denounced as false Mediaset’s claim that Vivendi’s change of heart had “fallen from the sky”.

De Puyfontaine said that its analysis showed it made sense for Mediaset Premium to remain close to Mediaset proper strategically and operationally, which was in linewith the general trend for broadcasters to offer free and pay TV services in a complementary way.

De Puyfontaine also said that Mediaset’s accusation that Vivendi had not honoured its contract was unacceptable and that some of the Italian broadcaster’s communiqués were defamatory.

He cited Vivendi’s investment in Telecom Italia as the basis for a potential alternative strategy in Italy.

De Puyfontaine denied that Vivendi’s real aim was to take control of the whole of Mediaset rather than its troubled pay TV division.

Fininvest president Marina Berlusconi alluded to this idea in a letter to Italian daily Corriere della Sera, in which she suggested that Vivendi was using a supposed industrial project to secure a key position as a Mediaset shareholder.