MILAN (Reuters) – Italy’s Mediaset on Friday won shareholder approval for governance tweaks needed to smooth a pan-European expansion plan despite opposition from its second-biggest investor Vivendi, which is fighting the project in court.
Controlled by the family of former Italian Prime Minister Silvio Berlusconi, Mediaset (MS.MI) last year approved a plan to merge its businesses in Italy and Spain (TL5.MC) 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 (NFLX.O) and web giants like Google (GOOGL.O). But 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.
Vivendi and Mediaset have been at odds since the French conglomerate withdrew from a deal to buy Mediaset’s pay-TV unit in 2016 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% holding in Telecom Italia (TLIT.MI).
The trust was prevented from voting at Friday’s meeting. Following 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 on Friday asked shareholders to approve changes to the bylaws of MFE suggested by the court, easily winning the vote thanks to the Berlusconi family’s 45.8% voting rights. Vivendi has said the proposed changes fail to address its concerns and has called for a broader overhaul.
Doubts over the future of 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.
Mediaset faces a March deadline to see its Dutch holding company plan through, otherwise the decisions of a September shareholder meeting that approved the project will no longer be valid based on existing Dutch laws.
“If the courts rule in our favour, we can do it,” Mediaset Chief Executive Pier Silvio Berlusconi said when asked if the company was confident of completing the plan in time.
The deadlock with Vivendi is weighing on Mediaset shares, which fell 5.5% in 2019 against a 27% rise in Italy’s all-share index .FTITLMS.
(GRAPHIC: Mediaset shares performance in 2019 compared to Italy’s mid – cap index – here)
Reporting by Elvira Pollina; Editing by Jane Merriman, Alex Richardson and Jan Harvey