November 10, 2017 / 7:04 PM / a year ago

Mediaset's directors propose governance changes in battle with Vivendi

MILAN (Reuters) - Italian broadcaster Mediaset’s (MS.MI) directors proposed on Friday a change in the size of its board and in the way its members are appointed, in a move that could restrict French shareholder Vivendi’s (VIV.PA) influence.

The Mediaset tower is seen in Cologno Monzese neighbourhood Milan, Italy, in this April 7, 2016 file photo. REUTERS/Stefano Rellandini/File Photo

The Milan-based group, owned by the family of former prime minister Silvio Berlusconi, is suing Vivendi in court after the French media giant last year backtracked on a deal to buy Mediaset’s Italian pay-TV unit Premium.

The rift between the two groups deepened when Vivendi became Mediaset’s second largest shareholder in December last year after quickly amassing a stake of 28.8 percent.

Fininvest, Berlusconi’s family holding company, owns 39.5 percent of Mediaset and the board is due for re-election in the spring of next year.

On Friday the incumbent board voted unanimously to propose cutting the maximum number of board members to 15 from 21.

It is also seeking to change the appointment system whereby competing lists of proposed board candidates are drawn up by individual shareholders. Currently members are then appointed from the different lists according to a voting system similar to a proportional one.

Under the proposed system, called a “closed list”, the list winning the majority of votes would get all but two or three of the board seats, depending on the size of the board. It is up to shareholders to determine the overall size of the board, which would in future range between seven and 15 seats, instead of the current five to 21 seats.

“The changes have been proposed to avoid a hung board and grant it stability,” a source familiar with the matter said.

The new system, if approved, would enable the board to make decisions without constant “arm wrestling”, he added.

The proposals will be voted on at an extraordinary shareholders meeting called for Dec. 15.

No one at Vivendi was immediately available for comment.

Editing by Greg Mahlich

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