Vivendi SA (VIV.FR) said late Wednesday it would appeal a decision by Italy's securities market regulator which deemed that the French media conglomerate has de facto control over Telecom Italia SpA (TIT.MI).
"Vivendi formally contests that interpretation and will appeal to the competent courts," the company said.
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The ruling by Consob, the Italian watchdog, could have consequences for the French group, among which might be the consolidation of Telecom Italia's debt on Vivendi's own balance sheet. Telecom Italia said it had adjusted net financial debt of 25.1 billion euros ($29.9 billion) at June 30.
Vivendi has a stake of nearly 24% in Telecom Italia while, of the operator's 15 board members, the French company has proposed at least nine. In June, Vivendi's chief executive Arnaud de Puyfontaine became Telecom Italia's executive chairman.
Vivendi has previously acknowledged it directs and coordinates activities at Telecom Italia, but denied having de facto control under Italian law. Telecom Italia also contested Consob's decision. The ruling contrasts with typical interpretations of corporate control in Italy, the company said.
The Italian government has also been investigating whether Vivendi has de facto control of Telecom Italia, a sign of its concern over a strategic national asset falling into foreign ownership.
Vivendi is fighting other regulatory battles in Italy. Earlier this year, Italy's communications regulator ruled that Vivendi can't hold large stakes in Mediaset SpA (MS.MI) and in Telecom Italia, since the investments violate antitrust regulations.
On Wednesday, the regulator said it received a plan from Vivendi to address this issue through the transfer of at least a 19.19% tranche of Mediaset shares to an independent entity.
-Write to Pietro Lombardi at email@example.com
(END) Dow Jones Newswires
September 14, 2017 07:18 ET (11:18 GMT)