Murdoch Misses in Second Bid for Mediaset

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Milan, Italy -- For the second time in less than threeyears, Australian-born mogul Rupert Murdoch has tried and failed to buy control ofMediaset, Italy's largest commercial-TV company.

The latest talks fell through March 20, after SilvioBerlusconi -- who owns 50.6 percent of Mediaset through his closely held holding company,Fininvest -- met with his two eldest children and the senior managers of his businessempire.

In an interview with evening-news program Canale Cinqueafter the meeting, Berlusconi said he was rejecting Murdoch's 5.8 trillion lire ($3.2billion) offer for his shares in Mediaset, for "reasons of the heart."

In 1995, following Berlusconi's brief spell asConservative prime minister, similar talks with Murdoch ended without an agreement, asBerlusconi balked at selling the company.

The day after the breakdown of the latest round of talks,Murdoch and Berlusconi held a

surprise meeting in London to examine the possibilities forfurther collaboration. Analysts speculated that this collaboration would likely be indigital transmissions.

Mediaset, which had previously been undecided about movinginto digital, recently launched Happy Channel, its first digital offering. The company,which has an option to buy the 10 percent of pay TV platform Telepiu currently owned byFininvest, is also taking part in the negotiations to create a single platform for digitaltransmissions in Italy.

However, the discussions have made little progress, asthose taking part have failed to reach agreements on vital aspects of a deal, includingcontrol of the platform and the valuation of existing assets.

The discussions received a further blow in early March,when European Union competition authorities sent a letter warning the participants that asingle platform would be "a substantial impediment" to competition inmultimedia.

The companies involved -- telco TelecomItalia, the Cecchi Gori Group and state broadcaster RAI, as well as Mediaset and Telepiu-- insisted that the conversations are continuing. 

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