(Recasts, adds Vivendi comment, shares)
By Emilio Parodi
MILAN Feb 24 Italian prosecutors are
investigating French tycoon Vincent Bollore for alleged market
manipulation when the company he chairs, Vivendi,
bought a stake in Italian broadcaster Mediaset, a source
said on Friday.
The probe will dampen speculation that the Berlusconis and
Bollore are about to end a dispute that began last July when
Vivendi abandoned a deal to buy Mediaset's pay-TV unit.
Hopes of an end to the hostility were raised when Vivendi
CEO Arnaud de Puyfontaine, also being investigated according to
the source, said on Thursday his company was still open to
building a "strong business relationship" with Mediaset.
Vivendi confirmed some of its executives were being
investigated, but did not name them.
In Italy, investigations do not imply guilt and do not
necessarily mean charges will be laid.
At 1450 GMT Mediaset shares were down 2.4 percent while
Vivendi shares were 4 percent lower after it reported a sharp
fall in profits late on Thursday.
Mediaset has accused Vivendi of never intending to honour
the deal to buy its pay-TV unit and tearing it up with the aim
of driving down Mediaset's share price to raid its stock.
Vivendi questioned the pay-TV unit's profit forecasts when
it ditched the deal and later bought up Mediaset shares,
acquiring a stake of just under 30 percent and becoming its
second biggest investor after former prime minister Silvio
It has denied Mediaset's claims.
"The registration of Vivendi executives by the Milan public
prosecutor is the result of an unfounded and abusive lawsuit
filed by the Berlusconis," Vivendi said in a statement.
A source familiar with the prosecutor's investigation said
Bollore, Vivendi's biggest shareholder with a 20.7 percent
stake, and de Puyfontaine, were being investigated under a 1998
law banning the dissemination of false news that can affect
Market manipulation carries a jail sentence of up to six
years and a fine of up to 5 million euros ($5.3 million) which
can be increased under certain circumstances.
Fininvest has also filed complaints against Vivendi with
Italy's market and competition watchdogs.
Vivendi's aggressive stake building has riled the Italian
government, which is concerned that Bollore could end up with
too much influence in corporate Italy.
The tycoon, acting through Vivendi and other firms, is
already the biggest shareholder in Telecom Italia and
has a major stake in investment bank Mediobanca, which
in turn controls Italy's biggest insurer, Generali.
Rome is drafting new corporate transparency rules to force
buyers who build up significant minority stakes in Italian firms
to disclose what their ultimate intentions are.
Industry minister Carlo Calenda said the rule would apply to
any bids to buy 5 percent or more of a listed company and would
be based on similar rules in France and the U.S.
Vivendi has denied it plans to take over Mediaset. Under
Italian law, it would be required to launch a mandatory takeover
offer if it were to reach a 30 percent shareholding.
($1 = 0.9443 euros)
(Additional reporting by Dominique Vidalon and Mathieu Rosemain
in Paris; Writing by Stephen Jewkes; Editing by Giselda Vagnoni
and Elaine Hardcastle)