MILAN (Reuters) - Italian broadcaster Mediaset (MS.MI) and its second-biggest shareholder Vivendi (VIV.PA) are still at odds over details of an agreement to end a three-year legal war, four sources said on Thursday, less than 24 hours ahead of a court-imposed deadline.
The two media groups are locked in a series of disputes, including over Mediaset’s plans to create a pan-European TV champion through the merger of its Italian and Spanish units into a Dutch holding company called MediaForEurope (MFE).
Last Friday, a Milan judge gave the two companies another week to settle their disagreements over MFE after attempts to reach an accord ahead of the hearing had failed.
Since then, lawyers on both sides have been working to come up with a draft compromise that could see MFE buy back two-thirds of Vivendi’s 29% stake in Mediaset, sources have said.
But a final deal has not yet been ironed out, as the two sides continue to haggle over price and other matters, sources with knowledge of the talks said.
Besides price, one sticking point has been disagreement over a five-year standstill clause Mediaset wants in the deal to stop Vivendi, or subsidiaries, buying back MFE shares, one source said.
The Milan-based broadcaster, controlled by the family of former Italian prime minister Silvio Berlusconi, wants to use MFE as a platform to build alliances with other peers in Europe, including Germany’s ProSiebenSat.1 (PSMGn.DE).
But Vivendi, which is worth ten-times more than the Italian broadcaster, opposes the 4 billion euro ($4.4 billion) deal, claiming Mediaset’s governance plans for MFE would be detrimental for minority shareholders.
Vivendi, led by French billionaire Vincent Bollore, has previously said it is looking to create a south European media powerhouse.
Any agreement would likely see Vivendi selling a 20% stake in Mediaset to MFE while withdrawing all its legal challenges to the MFE project, sources have previously said.
“Differences over price remain but they’re very close, it’s a matter of a few tens of millions,” one of the sources said on Thursday.
As part of any settlement, Mediaset would drop a multibillion-euro damages claim over Vivendi’s alleged u-turn on a pay-TV deal, sources said.
People familiar with the talks said both sides had good reason to break the deadlock, but added years of tensions had taken their toll.
“It’s a poker game, we’ll see if someone is bluffing”, one said.
Reporting by Elvira Pollina; Additional reporting by Gwaenelle Barzic in Paris; Editing by Mark Potter