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Rome has another go at Vivendi

Italian lawmakers are preparing the ground for another probe into Vivendi’s status as a shareholder of both TIM and Mediaset.

Rome has drafted new legislation that would enable regulator AGCOM to carry out a six-month investigation into media plurality, looking specifically at companies that operate in both the telecoms and media sectors, Reuters reported, citing unnamed sources. The inquiry will also include firms with stakes in both telco and media outfits, the sources said.

It’s not too much of a stretch to suggest that the Italian government doesn’t like Vivendi very much.

It is three years since the state moved to exercise a so-called ‘golden power’ over TIM, imposing a list of requirements on the incumbent in a bid to protect strategic assets and maintain national security. The trigger for that move was Vivendi’s presence as a major TIM shareholder; the government ruled that the French firm had taken de facto control of the telco and it was seriously unhappy about that. Vivendi was equally unhappy when the tables were later turned and activist investor Elliott Management built up its own stake in TIM and took control of the board. Tensions have since thawed – Vivendi conceded defeat about 18 months ago – and Elliott offloaded the bulk of its TIM shares earlier this year.

But Vivendi still holds 23.94% of TIM, making it the telco’s largest single shareholder, ahead of state-owned lender Cassa Depositi e Prestiti (CDP) with 9.89%.

That in itself is not a major issue. The problem at hand stems from the fact that Vivendi also holds a 28.8% stake in Mediaset and relations between the pair are not good, to put it mildly.

The Vivendi-Mediaset dispute has rumbling on for a few years; an aborted takeover deal almost half a decade ago that would have seen Vivendi take control of the Italian firm stirred up a considerable amount of friction and led to Vivendi building up its holding through the acquisition of shares.

An Italian regulatory ruling later required Vivendi to reduce its holding in either TIM or Mediaset to below 10%, a move Vivendi obviously challenged. The upshot was that Vivendi was unable to exercise the full voting rights for its Mediaset holding, reducing its voting share to 9.98% from 29.94%.

However, in September the European Court of Justice ruled in favour of Vivendi, declaring the Italian regulations on media plurality to be in breach of EU law. Cue cheering from Vivendi and vague mutterings from Mediaset about breaking into the telecoms business; it has since been linked with Italy’s single fibre network, incidentally.

But Rome is not letting this one lie. Its response has been to rewrite its laws and in the meantime, if the Reuters report on the proposed investigation proves to be correct, it appears to be looking to gather evidence to back up its case.

Vivendi is never going to have an easy time of it in Italy. The simple fact of not being Italian will have an impact on any company looking to do business in strategic sectors in the country; just look at the pride with which TIM announced that it had selected five domestic suppliers to provide the cable for its FiberCorp unit last month. But to make matters tougher for Vivendi, it has been in battle with the Italian government over one issue or another for many years. It’s not so much a question of regaining trust, but more that it was never there in the first place.

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