Vivendi and Mediaset mulling new three-way JV deal

Vivendi, Telecom Italia and Mediaset are circling a possible agreement that would give the Italian broadcaster a stake in a revamped version of the joint venture between Canal+ and Mediaset, according to Italian reports.

According to financial daily Il Sole 24 Ore, Vivendi is mulling a change in the ownership of its JV between its pay TV unit Canal+ and Telecom Italia (TIM), the Italian telco in which it is the largest single shareholder, to give Mediaset a minority stake.

Under the current structure, the JV is 60% owned by TIM and 40% owned by Canal+.

According to Il Sole 24 Ore, the French media giant is looking at a three-year agreement that would give Canal+ and Mediaset 20% each in the JV, with TIM continuing to hold a 60% stake. Mediaset would have a put and call option that would allow it to exit the venture at a higher price than it paid to join. TIM would commit to acquire about €460 million worth of Mediaset content over the next six years.

According to the paper, the agreement would uncouple a rapprochement between Vivendi and Mediaset from the question of compensation being paid over Vivendi’s decision to withdraw from the 2016 deal that would have seen it take over Mediaset’s pay TV arm, Mediaset Premium.

The pair have been in dispute since that time, with a court hearing on Mediaset’s claim against the French company now scheduled for February 27, postponed from December.

According to Il Sole 24 Ore, Mediaset sees the February 27 court date as a deadline for any agreement. However, a number of hurdles could stand in the way of a deal, according to the paper. Vivendi must secure the agreement of TIM’s minority shareholders, some of whom are unconvinced of the merits of the existing Canal+ JV deal.

Under the terms set by Italian regulator CONSOB for transactions with a related party, which covers the JV – because Vivendi is deemed to be TIM’s controlling shareholder – the deal must be approved by independent directors without the participation of those related to the transaction. According to Il Sole 24 Ore, it is not clear whether this would exclude independent directors nominated by Vivendi.