Rupert Murdoch's News Corp has reacted angrily to moves by rival Jean-Marie Messier of Vivendi to pull out of the planned Italian pay-TV merger of Vivendi's Telepi's with News Corp's Stream.
Vivendi said on Wednesday it would seek to pull out of the merger, in light of conditions imposed by the Italian antitrust authority. The merger would have increased cash consumption at Canal Plus, its loss-making pay-TV unit.
News Corp responded by saying it had notified Vivendi and Telepiu that their rejection of the deal was contrary to the terms of the original merger agreement.
"Vivendi's current financial constraints are not valid reasons for failing to comply with the agreement," News Corp said, adding that it intended to "enforce all of its rights" under the merger agreement.
The dispute could cause more friction between Mr Messier, who has been facing increasing pressure from investors in recent weeks, and Mr Murdoch. In March, Canal Plus, the pay-TV arm of Vivendi, filed a $1bn suit against a News Corp subsidiary accusing it of stealing technology and encouraging piracy to undermine Vivendi's pay-TV businesses.
Earlier this week Vivendi drew a line under its relations with BSkyB, the UK satellite broadcaster owned by Mr Murdoch, with the sale of its remaining stake worth£1.7bn ($2.5bn).