July 22, 2020 / 11:24 AM / 12 days ago

Italian court rejects Vivendi's request to lift Mediaset restrictions

MILAN/ROME (Reuters) - An Italian court has rejected a request by Vivendi (VIV.PA) to lift restrictions that limit the French media group’s voting rights at Italian broadcaster Mediaset (MS.MI), a court document showed on Wednesday.

FILE PHOTO: A woman walks pass by a sign of Vivendi at the main entrance of the entertainment-to-telecoms conglomerate headquarters in Paris, France, November 21, 2019. REUTERS/Gonzalo Fuentes

Vivendi, which also owns 23.9% of Telecom Italia (TLIT.MI), has been at loggerheads with Mediaset since pulling out of a deal to buy its pay-TV unit in 2016 and then building a 28.8% stake in a move the Italian broadcaster considered hostile.

In 2017, Italy’s communication watchdog said Vivendi’s holdings in Mediaset and Telecom Italia broke competition rules and ordered it to cut one of the stakes to below 10%.

To comply, Vivendi transferred two-thirds of its stake in Mediaset to a trust, which was subsequently barred from voting at the Italian company’s shareholder meetings.

Vivendi had asked the administrative court to suspend the restrictions imposed by the Italian watchdog, saying the market situation had changed.

But the court said there were no compelling reasons to satisfy Vivendi’s request and that any economic damage suffered by the French group could be recovered in the future.

Mediaset and Vivendi declined to comment on the ruling.

The French group’s request to lift the restrictions was part of its battle against a planned reorganisation at Mediaset, which is controlled by the family of former Italian Prime Minister Silvio Berlusconi.

Last year, Mediaset approved a plan to merge its Italian and Spanish businesses (TL5.MC) under a Dutch holding company, which it wants to use as a vehicle to pursue tie-ups with other peers in Europe.

Vivendi is fighting the plan in courts across Europe, saying the governance structure of the new entity would increase Berlusconi’s grip over the company.

The plan remains on hold pending a Spanish court decision, expected as early as this week.

Reporting by Domenico Lusi, Elvira Pollina; editing by James Mackenzie and Mark Potter

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