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Vivendi and Mediaset trade accusations in wake of controversial EGM

Vivendi has accused Mediaset of an “unlawful refusal” to allow a key shareholder to vote in a crucial EGM on Friday and has said the Mediaset board has placed the company in “a situation of serious legal uncertainty” after ignoring an opinion on the case from the EU Court of Justice’s advocate general.

The shareholders meeting called on Friday approved some modifications in the articles of association of MediaForEurope, the holding company Mediaset wants to create to house its merged Italian and Spanish operations, to which Vivendi has strongly objected.

Mediaset said the EGM votes cleared the way for the creation of the new pan-European group “with a leadership position in its reference markets” and the scale to potential extend its reach to other European markets, with a specific reference to the company’s investment in German broadcaster ProSiebenSat.1, in which it now owns a 15.1% stake.

The latter has acknowledged Mediaset as a legitimate shareholder and has expressed openness to closer collaboration but has played down any talk of a merger of the pair.

According to Mediaset, the merger of its Italian and Spanish arms will generate synergies of €100-110 million before taxes over the next four years.

At the EGM, during which Mediaset chairman Fedele Confalonieri reportedy accused Vivendi of a conflict of interest and of aiming to prevent a competitor from growing its business, Mediaset secured the approval of 79.8% of shareholders’ votes, equivalent to 48.2% of the overall share capital.

The Italian media group barred Simon Fiduciaria, holder of a 19.19% stake in the company, from attending after the Lazio regional administrative court (TAR) rejected an appeal by Vivendi to overturn Italian regulator AGCOM’s ruling preventing it from exercising voting rights held in trust through the outfit.

The Lazio TAR ruling opened the way for a further re-evaluation in the event of a ruling on the case by the EU Court of Justice, but specified that the recent pronouncement by The EU Advocate General that the law that allowed Mediaset to block voting by Simon Fiduciaria was in breach of EU rules was not in itself legally binding.

Vivendi had originally been forced by Italian AGCOM to transfer the bulk of its stake in Mediaset to Simon Fiduciaria to comply with Italy’s TUSMAR ruling that prevents companies from simultaneously holding large stakes in media and telecom companies at a time when Vivendi was said to exercise effective control of Telecom Italia as that company’s largest shareholder.

Vivendi has consistently fought to force Mediaset to allow voting rights for the Simon Fiduciaria stake to be exercised, while Mediaset, which maintains that the French company’s stake in it was acquired illegitimately, has resisted.

An Italian judge is meanwhile set to rule on whether the MediaForEurope plan can go ahead over Vivendi’s objections at a court hearing set for January 21.