Fininvest sues Vivendi for €570 million over aborted Mediaset deal

The Vivendi office is seen in Paris on Wednesday, May 17, 2006.Following the legal action taken by Mediaset against Vivendi last week, the Italian broadcaster’s parent company Fininvest has delivered its own blow to the French media company by filing a claim for damages against it to the tune of €570 million.

Mediaset is suing Vivendi for €50 million a month starting from June 25, the date the French company said it did not intend to honour the contract it signed in April that would have seen it take overall control of Mediaset’s loss-making pay TV unit, Mediaset Premium. Mediaset also said it risked losing €1.5 billion if Vivendi ultimately failed to respect the terms of the original deal.

Fininvest has now filed its own separate claim in Milan, asking for an order to be served on Vivendi to force it to “fully comply with the shareholders’ agreement attached to the contract entered into with Mediaset S.p.A” in April and also claiming compensation of “at least” €570 million for “the serious damages already caused”.

According to Fininvest, the figure relates to the decrease in the value of Mediaset’s shares since Vivendi reneged on the agreement, and also to “the fact that their value would have increased had the contract been executed and the undeniable harm caused to corporate image”.

Mediaset shares have dropped by about 15% since Vivendi said it no longer intended to acquire control of the pay TV unit and proposed instead to take a more modest 20% stake along with a plan to take a 15% stake in Mediaset proper.

The legal moves by Mediaset and Vivendi follow a period that saw reports emerge that Vivendi was edging towards some kind of compromise proposal, and some observers have suggested that the legal actions are intended to put pressure on the French company ahead of this week’s half-year results, due to be announced after the markets close tomorrow.

According to Italian financial press, Vivendi could use the results as an opportunity to make peace overtures using Italian bank Mediobanca, in which Vivendi chairman Vincent Bolloré has a 7.9% stake, as an intermediary, with a formal offer to follow.

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