(recasts, adds context, reports and analyst comments)
By Giulia Segreti
MILAN, Dec 15 (Reuters) - Mediaset shares fell on Thursday after France's Vivendi said it had reached its initial goal of amassing a 20 percent stake in Italy's biggest private broadcaster.
Mediaset shares posted their biggest one-day rise on record after Vivendi said on Monday it intended to buy up to a fifth of the Italian company in a raid seen as a possible precursor to a full hostile takeover.
Traders and analysts said, however, that Vivendi now had limited room to move as it was only 10 percent shy of the ownership threshold that would trigger a mandatory bid for Mediaset under Italian law.
"We expect Vivendi to play the long game here," investment bank Liberum said in a note.
Vivendi Chairman Vincent Bollore is interested in Mediaset as part of his plan to create a southern European media group but he has fallen out spectacularly with Mediaset's founder, former Italian prime minister Silvio Berlusconi.
Berlusconi responded to Vivendi's plan to buy 20 percent of Mediaset by lodging a criminal complaint of market manipulation against the French firm. Italian prosecutors are investigating.
The Italian government has also waded into the battle, concerned that Bollore, who has interests in Telecom Italia and Mediobanca, could end up wielding an even bigger influence over Italy's corporate landscape.
Italian Industry Minister Carlo Calenda said on Wednesday Rome was monitoring the Mediaset situation closely.
Berlusconi said his family, which holds 39.8 percent of Mediaset's voting rights through investment vehicle Fininvest, would increase its shareholding and fight any move by Vivendi to loosen their grip on the broadcaster.
Italian dailies reported that entrepreneurs close to Berlusconi could be willing to pick up Mediaset shares to restrict Vivendi's room for manoeuvre.
Liberum analysts said they expected Vivendi to "eventually 'persuade' (Berlusconi) to exit the Mediaset stake, either by selling directly to Vivendi or selling down its stake in the market".
Italy remains a major focus for the French media tycoon and the acquisition of a stake in Mediaset mirrors the tactics used by Vivendi to tighten its grip on firms such as software games maker Ubisoft, Gameloft and Telecom Italia.
Vivendi initially acquired 2 percent of the telecoms firm in June 2015 and in under a year it increased stake its stake to just under 25 percent, making it the biggest investor and giving it effective control.
"With the (shares) obtained in the last days, the French group is close to being able to block certain decisions in extraordinary shareholding meetings and hence obtain a greater negotiating power with Fininvest," writes broker ICBPI. (Additional reporting by Maria Pia Quaglia; editing by Mark Bendeich and David Clarke)