French firm ‘surprised’ by AGCOM order to sell down stake in either Telecom Italia or Mediaset.
Vivendi on Tuesday revealed that it will challenge a ruling from the Italian telco regulator that requires it to reduce its holding in either Telecom Italia or media outfit Mediaset within the next 12 months.
L’Autorità per le Garanzie nelle Comunicazioni (AGCOM) conducted an investigation into the influence held by Vivendi over both companies and concluded that its position in the two companies violates Italian law.
The regulator is concerned about protecting competition; in this case it is anxious to preserve media pluralism and avoid the creation of dominant positions.
While many industry watchers had been expecting such an announcement, Vivendi itself said it was "surprised" by the decision.
"It is indisputable that Vivendi neither controls nor exercises a dominant influence on Mediaset which is controlled on an exclusive basis by Fininvest with a stake close to 40%," Vivendi said in a statement late on Tuesday.
Vivendi’s stake in Mediaset stands at around 29%.
"Vivendi reserves the right to take any appropriate legal action to protect its interests, including filing an appeal to the AGCOM decision at the Regional Administrative Court (TAR) and to submit a formal complaint to the European Commission for the breach of EU law," the firm added.
Vivendi is Telecom Italia’s largest shareholder with a stake of 23.94%. Its activities over the past couple of years suggest that it is looking to increase rather than reduce its influence at the telco, so should it fail in its bid to challenge AGCOM’s ruling, it seems likely that it will sell down its Mediaset holding rather than reduce its Telecom Italia stake.
A fortnight ago Reuters reported that Vivendi had informed the European Commission that it could take de facto control of Telecom Italia by increasing its representation on the telco’s board at a shareholder meeting in May.
Just days later Vivendi submitted a list of Telecom Italia board nominees headed by its own CEO Arnaud de Puyfontaine, a move that backs up reports that it is keen to replace existing chairman Giuseppe Recchi.
Recchi is present on Vivendi’s list, but lower down the order, as are Telecom Italia chief executive Flavio Cattaneo and others.