By Gwénaëlle Barzic and Sophie Sassard
MILAN/PARIS (Reuters) – French media group Vivendi has offered to pay compensation to Mediaset to settle a dispute with the Italian broadcaster over a soured pay-TV deal, three sources close to the matter said on Tuesday.
The two companies have been at loggerheads since July last year when Vivendi, in an unexpected U-turn, pulled out of a 800 million euro ($945 million) contract that would have given it full control of Mediaset’s pay-TV arm Premium, saying the unit’s business plan was unrealistic.
One of the sources said Vivendi would pay a first tranche of 250 million euros as part of a wider tentative agreement. The person said more money would be paid at a later stage, but did not quantify the amounts.
One of the other two sources said Mediaset could join a joint venture being set up between Vivendi’s own pay-TV arm Canal+ and Italian phone group Telecom Italia.
Vivendi is the biggest shareholder in Telecom Italia with a 24 percent stake.
This source said it was too early to say whether the two sides would eventually reach a compromise.
“There is a long list of problems to solve,” the person said.
Mediaset, Vivendi and Telecom Italia declined to comment.
Bloomberg reported earlier on Tuesday that Vivendi was considering making a cash and stock offer to settle the dispute as part of a compensation package that may be valued around 1 billion euros, pushing Mediaset shares up more than 5 percent. The stock closed up 1.8 percent.
The sources refused to comment on the size of an eventual settlement. Mediaset and top shareholder Fininvest, the holding company of the family of former prime minister Silvio Berlusconi, have asked for damages totaling 3 billion euros.
Since the dispute first broke out, the two companies have been trading blows, launching legal action and raising alarm bells in Rome, where politicians have already been growing increasingly wary of French influence over corporate Italy.
Mediaset said in April it would have broken even last year had it not been for the failed sale of its pay-TV arm.
The spat was aggravated in December when Vivendi bought shares to become the second largest shareholder in the Milan-based TV group after Berlusconi’s family. The French company has repeatedly said the move was not hostile but a sign of long-term interest.
(Reporting Gwenaelle Barzic in Paris, Sophie Sassard in London, writing by Agnieszka Flak; editing by Silvia Aloisi and David Evans)