Thomson Reuters
French billionaire and Vivendi Chairman Vincent Bollore built a 28.8 percent stake in Mediaset.
Mediaset and Vivendi have been at loggerheads since July, when the French giant ditched an agreement to take full control of Mediaset's Premium pay-TV unit, leading the companies to trade threats of legal action.
Discussions of a deal were opened in the summer to create a pan-European competitor to streaming giant Netflix.
Since then, Vivendi Chairman Vincent Bollore has further angered Italy and the Berlusconis by swiftly building a 28.8 percent stake in Mediaset, becoming its second biggest shareholder after the family of the former prime minister and raising speculation, denied by Vivendi, that it may be plotting a hostile takeover.
In an ambitious plan aimed at boosting the group's operating profits by 2020, Mediaset said on Wednesday it was looking to turn Premium around and make it less costly and less dependent on soccer.
The new strategy scales down the pay-TV unit's operations, making them more sustainable, a concern raised by Vivendi when it backtracked on the Premium deal saying its industrial plan for the pay-TV business was unrealistic.
"Mediaset is open to any proposal that creates value and makes industrial sense," chief executive Pier Silvio Berlusconi told several Italian newspapers on Thursday, without elaborating.
But the CEO, son of former prime minister Silvio Berlusconi, said Vivendi had not yet made any proposal "in this direction" and that the last contact with the French group in December had been a "courtesy meeting" with Chief Executive Arnaud de Puyfontaine.
It was not immediately clear whether the new Premium strategy would make an accord with Vivendi more likely.
The struggle between Vivendi and Mediaset highlights the pressure to consolidate among European media and telecoms groups, which face increasing competition from online providers such as Netflix and Amazon.
Italian media reported this week that a possible solution to the spat could see the Berlusconi family swap its stake in the broadcaster for a holding in phone incumbent Telecom Italia, in which Vivendi is a top shareholder with a 24.9 percent share.
A sale of Vivendi's stake in Telecom Italia could ease the ongoing regulatory concerns about the French media group's existing stake in Mediaset. Italian anti-trust regulations prevent a company from having large shares in both media companies and telecoms companies at the same time.
But Pier Silvio Berlusconi said his family, which controls Mediaset with a 38.3 percent stake, would not be interested in becoming a Telecom Italia shareholder.
Bloomberg reported that a potential buyer for Telecom Italia could be French telecoms company Orange, but the carrier denied it. Orange was reported by the Wall Street Journal to be considering a stake in Vivendi's TV station Canal Plus.
De Puyfontaine said earlier this month that, despite difficulties finding common ground with Mediaset, the group had never given up on its plans to build a big southern European media and telecoms group.
However, Berlusconi told La Stampa newspaper that "after all that has happened, there is a bit of scepticism" about reaching an agreement with Vivendi.
A source close to the matter told Reuters on Thursday it was up to Vivendi to make a proposal and that Mediaset could only wait and see.
The source added that the original April deal for Premium would be the best solution but doubted "the French will be willing to backtrack."
Vivendi declined to comment.
Broker Jefferies said it believed the Premium deal would be revived. "We assume Vivendi will be the ultimate owner of the Pay-TV business and continue to consolidate the business, with a deal assumed by mid-year," it said in a report.
(Reporting by Giulia Segreti, Valentina Za and Claudia Cristoferi in Milan, additional reporting by Gwenaelle Barzic in Paris; Editing by Clarence Fernandez and Adrian Croft)