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Mediaset demands Vivendi honour deal as seizure bid heads for court

MediasetMediaset still expects Vivendi to honour the terms of the aborted strategic agreement between the pair, despite its ongoing move to seize shares in the French media company that were to be attributed to it under that deal.

Speaking to analysts after the company reported less than stellar Q3 financials – its results being pulled down by the pay TV unit at the centre of its battle with Vivendi – Mediaset chief financial officer Marco Giordani said that the company remained set on securing the “execution” of the contract, which would see Vivendi take control of the troubled Mediaset Premium unit

Mediaset has called for the seizure of the 3.5% stake in Vivendi that it was promised in exchange for an equal stake in Mediaset as part of that deal, along with the acquisition of Mediaset Premium. A Milan court has ruled its application admissible, and a court date has now been set for November 23.

Mediaset said that “maximum attention would continue to be paid to the evolution of the ongoing legal proceedings” and blamed Vivendi’s failure to honour its side of the deal for the deteriorating situation at Mediaset Premium.

Mediaset posted a €88.8 million net loss for Q3 as a result of problems at the pay TV unit. Mediaset Premium sales slowed significantly in the third quarter.

Pay TV revenues for the third quarter amounted to €148.9 million, compared with €140.7 million for the same period in 2015. Premium revenues for the first nine months amounted to €150.2 million, up from €126.7 million. Rights amortization and operating costs contributed to a significant operating loss, up to €198.7 million for the first nine months from €101.6 million.

Mediaset said that while its first half results showed an operating performance in line with budget, the third quarter was heavily influenced negatively by Vivendi’s failure to respect the agreement. It said that this had led it to incur addition costs in the aqcquisition of linear content that were not foreseen.

Mediaset’s overall performance was lifted somewhat by its Spanish business, which posted revenues of €711.7 million for the first nine months, up from €674.7 million, and a net profit of €131.8 million, up from €113.8 million.

Mediaset as a whole posted revenue of €2.564 billion for the nine months, up from €2.414 billion, and a net loss of €116.6 million, a decline from a net loss of €36.1 million.