Mediaset, Vivendi still locked in talks as Friday deadline arrives

MILAN/PARIS, Nov 29 (Reuters) - Italian broadcaster Mediaset and shareholder Vivendi were still negotiating on Friday to find a deal to end a three-year legal battle after all-night talks failed to find a breakthrough, sources said.

Mediaset’s board has called a meeting to examine the details of a possible deal, the sources said, as the two sides face a Friday deadline set by a judge in Milan to settle their differences. “They’re still not there,” one of the people said.

Mediaset and Vivendi are locked in a series of disputes and recently fell out over the Italian broadcaster’s plans to create a pan-European TV champion through a Dutch-based holding company called MediaForEurope (MFE).

If the two sides do not show up with an agreement over disputed MFE bylaws, the court could rule on a request from Vivendi to suspend MFE operation.

The Mediaset board on Friday could give a conditional green light to a deal subject to a few conditions, one of the sources said.

In addition to the pricing of Mediaset shares Vivendi should sell, there has been disagreement over a five-year standstill clause the Milan-based broadcaster wants in the deal to stop Vivendi buying back MFE shares, a source previously said.

On Thursday sources said the two groups were close to ending their legal stand-off with a deal that would see Vivendi sell a 20% stake in the Italian broadcaster.

The Milan court hearing is scheduled to begin at 1130 GMT.

Reporting by Elvira Pollina in Milan and Gwenaelle Barzic in Paris; writing by Stephen Jewkes; editing by Jason Neely