MILAN (Reuters) - A judge on Tuesday postponed a court hearing between Italy’s Mediaset (MS.MI) and France’s Vivendi (VIV.PA) over a pay-TV dispute that threatens to disrupt the French group’s plans to create a European media champion.
Vivendi, the top shareholder in Italy’s biggest phone company Telecom Italia (TLIT.MI), owns almost 30 percent of Mediaset and is looking for ways to gain scale to compete with U.S. and Chinese giants.
On Tuesday, U.S. cable operator Comcast Corp (CMCSA.O) offered to pay $31 billion to buy Sky SKYB.L, challenging Rupert Murdoch’s Fox and Bob Iger’s Walt Disney.
“Things are moving fast. If Comcast is successful it would build a European player that could be hard to compete with,” said Stefano Fabiani, fund manager at Italy’s Zenit SGR.
Vivendi, headed by Breton financier Vincent Bollore, has been locked in a bitter legal feud with Mediaset since July 2016 when it pulled out of a deal to buy the broadcaster’s struggling pay-TV unit.
Despite dropping that deal, Vivendi’s big holdings in Telecom Italia (TIM) and Mediaset, which is controlled by former Italian Prime Minister Silvio Berlusconi, suggest it sees Italy as a key part of its pan-European plans.
But the judge’s decision to push back the court hearing to Oct. 23 risks dragging out the dispute. The delay also comes days before an Italian national election that could catapult Berlusconi’s Forza Italia party into a position of power.
The four-times former prime minister cannot hold public office until 2019, due to a tax fraud conviction. But even if his group’s coalition does not get an outright majority, he could still be a kingmaker in a broad government and would be in a position to exercise influence on his rival’s assets in Italy.
At the October hearing, the judge will decide whether to unite the various cases stacked up against Vivendi, said Andrea Di Porto, a lawyer for Berlusconi’s holding company Fininvest.
These include demands Vivendi execute the contract to buy pay-TV unit Premium, a request by Mediaset and Fininvest for 3 billion euros ($3.7 billion) in damages, and a request for Vivendi to sell down its stake in Mediaset to under 10 percent.
Last year, Italian communications authority AGCOM asked Vivendi to reduce its stake in TIM or in Mediaset by April 2018. It was a Berlusconi government in 2014 that passed a law forbidding companies from building a dominant presence in the telecom and media sectors.
“An agreement is still possible out of court. The industrial project between the two companies makes more sense than ever,” a source close to Vivendi said on Tuesday.
Finding common ground would help both media companies find a response to a rapidly changing television marketplace.
In January, Vivendi CEO Arnauld de Puyfontaine said Europe needed to build strong players to compete against the likes of Google (GOOGL.O), Apple (AAPL.O), Time TWX.N, Disney (DIS.N), Netflix (NFLX.O) and the Chinese.
“If not we are doomed,” he said.
Mediaset’s share were up 1.9 percent at 1500 GMT, while Vivendi’s were up 1.2 percent.
Additional reporting by Gwenaelle Barzic in Paris, Giselda Vagnoni in Rome, Stephen Jewkes in Milan Writing by Stephen Jewkes Editing by Angus MacSwan and Mark Potter