The agreement, which follows a series of recent court victories by Vivendi, will see the two companies waive all litigation and claims against each other. A recent court ruling in Milan established that Vivendi was liable only to pay €1.7 million in damages to Mediaset, which had sought €3 billion over the termination of a 2016 agreement between the pair.
Vivendi has now agreed to support the transfer of Mediaset’s headquarters to the Netherlands and will vote in favour of proposed changes to the company’s rules ending a double-voting mechanism. Mediaset’s main shareholder, the Berlusconi investment vehicle Fininvesst, recently agreed to drop its plan for the latter, which had been designed to strengthen its control of the company.
Mediaset has not yet indicated that it plans to revive the MediaForEurope plan that would have seen it merge with its Spanish arm in a new company domiciled in the Netherlands, a plan that Vivendi was able to veto.
Fininvest will buy 5% of the Mediaset share capital, held directly by Vivendi, at an ex-dividend price of €2.70 per share. Vivendi will remain a shareholder of Mediaset with its residual 4.61% stake and will be free to retain or sell this stake at any time and any price.
Vivendi has committed to sell on the stock market, over a five-year period, the complete 19.19% Mediaset equity stake held through Simon Fiduciaria, the blind trust in which it was forced to place the majority of its stake in the company as a result of an Italian media law that has since been abolished after it was found to contravene European rules. Fininvest will have a call option to buy any unsold portion in any 12-month period at the set annual price.
The transactions will see Vivendi retain a 4.6% stake in Mediaset.
Vivendi’s subsidiary Dailymotion has agreed to a one-off payment of €26.3 million to settle its dispute with Mediaset over the distribution of content to which the Italian company held the copyright.
Vivendi and Mediaset have entered a “good neighborhood” agreement in free-to-air television and standstill commitments for a five-year term.
Fininvest will propose an an extraordinary dividend of €0.30 per share for payment on July 21,
The agreement between the pair follows Mediaset announcing better than expected full-year 2020 financials, with a net profit of €139.3 million and improved free cashflow.
Giving a thumbs-up to Mediaset’s performance, which also included a note on advertising growth in Q1 amounting to 6.1%, analysts at Berenberg said that a revival of the aborted MediaForEurope plan still made sense.
“While management has ruled out any imminent transaction with Mediaset España, the desire for European consolidation remains unabated, and Vivendi’s support for Mediaset’s plan to redomicile in the Netherlands should permit the creation of a neutral platform that could be the basis of an enlarged group benefiting from synergies in advertising and streaming technology as well as common overheads and shared know-how. We continue to believe that this approach offers upside in the medium term, and represents a sensible solution to increased competition from Big Tech,” Berenberg said.
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