July 22, 2019 / 4:46 PM / 4 months ago

Mediaset snubs Vivendi request for new vote as tensions rise

MILAN (Reuters) - Mediaset rejected a request by investor Vivendi to reconvene an extraordinary shareholder meeting as the French group tries to scrap a loyalty share scheme allowing the Berlusconi family to keep its grip on the Italian broadcaster.

The move marks another twist in an escalating row between Mediaset and Vivendi that could derail the broadcaster’s plan to put the group and its separately-listed Spanish unit under a new Dutch holding company.

Mediaset, which is controlled by the family of former Prime Minister Silvio Berlusconi, introduced a loyalty share scheme in April aimed at strengthening its grip on the company by rewarding longer-term investors with additional votes.

The plan is opposed by Vivendi, which was prevented from voting at the shareholder meeting that approved the move. The French group wanted Mediaset to call a new meeting and let it vote, in the hope it could sink the scheme.

Still, the Italian broadcaster said it had accepted Vivendi’s request to allow the 9.6% stake it directly holds to qualify for Mediaset’s loyalty voting scheme, though it would wait for a ruling from an Italian court on that.

A hearing on the case is scheduled for Nov. 26.

A Vivendi spokesman did not immediately respond to a request for a comment.

LEGAL BATTLE

Mediaset and Vivendi are embroiled in a prolonged legal battle stemming from the failed sale in 2016 of Mediaset’s pay-TV unit to the French media conglomerate controlled by Vincent Bollore.

After it backtracked on the deal, Vivendi built a 28.8% stake in Mediaset but was forced to transfer most of its voting rights into a trust because of antitrust concerns and has been prevented from voting at shareholder meetings.

The row threatens to disrupt Mediaset’s planned corporate overhaul under which the company and its Spanish subsidiary plan to merge into a new Amsterdam-based holding.

Vivendi could potentially scupper the corporate overhaul if it exercises its right of withdrawal as Mediaset has set a ceiling of 180 million euros on the cash outlay for the option, well below the Vivendi stake.

On Monday Mediaset shares closed 3.6% below the price the company set for the withdrawal right at 2.77 euros per share amid low volumes as investors fear the plan could be shelved due to the increasing tensions between the group and Vivendi.

Vivendi has criticized the planned reorganization - that will be put before shareholders on Sept. 4 - accusing Mediaset of damaging the interests of minority investors.

Reporting by Elvira Pollina, editing by Deepa Babington

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