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Italy court asks ECJ to rule on Vivendi's appeal on Telecom Italia and Mediaset stakes

Italy court asks ECJ to rule on Vivendi's appeal on Telecom Italia and Mediaset stakes
The Vivendi logo is pictured at the main entrance of the entertainment-to-telecoms conglomerate headquarters in Paris, March 10, 2016. REUTERS/Charles Platiau/File Photo GLOBAL BUSINESS WEEK AHEAD - SEARCH "GLOBAL BUSINESS AUG 22" FOR ALL IMAGES   -   Copyright  Charles Platiau(Reuters)
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ROME (Reuters) – An Italian administrative court has asked the European Court of Justice to rule on Vivendi’s <VIV.PA> appeal against a demand that the French group cut its stake in either Telecom Italia <TLIT.MI> or broadcaster Mediaset <MS.MI>.

Italy’s national communications authority (AGCOM) last year ordered Vivendi to reduce its stake in one of the two companies within a year, ruling it was in breach of regulation designed to prevent a concentration of power in the media industry.

AGCOM declined to comment on the court’s decision, documented in a court order issued late on Monday.

Vivendi is the biggest single shareholder in Telecom Italia (TIM) with a 24 percent stake and had accumulated a 28.8 percent shareholding in private broadcaster Mediaset, controlled by the family of former Prime Minister Silvio Berlusconi.

Vivendi appealed AGCOM’s decision but in April this year it transferred 19.19 percent of its stake in Mediaset to a trust called Simon Fiduciaria to comply with the order.

A ruling in favour of Vivendi could mean the French group gets back ownership of the stake it transferred.

Vivendi’s lawyers have argued the decision by AGCOM is discriminatory and goes against both Italian and European rules given Vivendi does not exercise a dominant influence on Mediaset.

AGCOM’s decision was when Vivendi exercised de facto control over TIM’s board. That changed when U.S. hedge fund Elliott pulled off a boardroom coup at the Italian phone group in May, wresting control away from the French investor.

Following the board change, AGCOM ruled in July that Vivendi does not control or have any dominant influence over TIM.

However, an official at the regulator has said the new governance set up at TIM did not change Vivendi’s obligations regarding its stakes in the two Italian companies.

(Reporting by Domenico Lusi; writing by Agnieszka Flak; Editing by Keith Weir)

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