Mediaset seeks shareholder approval to ease pan-European plan

Elvira Pollina

MILAN, Jan 10 (Reuters) - Italy's biggest commercial broadcaster Mediaset has called a shareholder meeting on Friday over governance tweaks needed to ease a pan-European expansion plan which its second-largest investor Vivendi is fighting in court. Controlled by the family of former Italian Prime Minister Silvio Berlusconi, Mediaset last year approved a plan to merge its businesses in Italy and Spain under a Dutch-based company, called MediaForEurope (MFE). The broadcaster wants to use the new entity to pursue tie-ups with European peers to take on competition from streaming apps such as Netflix and web giants like Google. But French media group Vivendi, led by billionaire Vincent Bollore, opposes the plan saying the governance structure of the new entity would strengthen Berlusconi's grip on the company. In response to Vivendi's legal challenge, a Spanish court has provisionally put the merger on hold, while a decision by a Milan court over the French group's request to suspend the deal is still pending. To increase the chances the Milan judge will rule in its favour, Mediaset called an extraordinary shareholder meeting for Jan. 10 to approve changes to the bylaws of MFE suggested by the court. Vivendi however said in a letter to Mediaset's board last month that the proposed changes failed to address its concerns and called for a broader overhaul.

NO TRUCE Doubts over the future Mediaset's pan-European plan increased after Mediaset and Vivendi failed to resolve their multiple legal disputes, including the one over MFE, with an out-of-the court agreement. Vivendi and Mediaset have been at odds since the French conglomerate withdrew from a deal to buy Mediaset's pay-TV unit and then built up a 29% stake in the group, which the Italian broadcaster considers hostile. Two thirds of that stake is held in a trust following a ruling by the Italian telecoms watchdog over Vivendi's excessive presence in the country's media and telecoms sectors given its 24% stake in Telecom Italia The Berlusconi family's holding company, Fininvest, holds 45.8% of Mediaset's voting rights, meaning it will almost certainly get its way on Friday, despite Vivendi's opposition if it bars the trust from voting as it has done in the past. Mediaset's board will take a decision on whether to exclude the trust ahead of the shareholder meeting. The deadlock with Vivendi is weighing on Mediaset shares, which fell 5.5% in 2019 against a 27% rise in Italy's mid-cap index.

(Reporting by Elvira Pollina. Editing by Jane Merriman)