(Adds Vivendi declined to comment)
By Giulia Segreti
PARIS Dec 14 French billionaire Vincent Bollore
raised the stakes in his battle with former Italian prime
minister Silvio Berlusconi on Wednesday, buying a fifth of
Berlusconi's Mediaset broadcaster in a hostile raid that drew
the ire of Rome.
Bollore's media group, Vivendi, said it had raised
its stake in Mediaset to 20 percent in a move that
prompted a warning from the Italian government, which cautioned
Vivendi against mounting a hostile takeover bid.
Italian Industry Minister Carlo Calenda said in a statement
that Mediaset operated in a strategic sector, chiming with media
speculation that Rome fears Bollore has ambitious goals in
Italy's media and telecoms industries.
"The government will monitor the situation attentively," he
said, adding that Rome fully respects market rules.
Industry analysts doubt that Bollore will launch a hostile
bid for Mediaset but say that the corporate raider could use the
stake to further his ambitions in Italy.
Mediaset is Italy's largest private broadcaster and owns
three of the country's most-viewed channels. Its pay-TV unit
Premium holds rights to broadcast both Italy's Serie A soccer
championship and Europe's Champions League matches.
Under Italian market rules, Vivendi would be required to
launch a mandatory takeover offer for Mediaset if it reached a
30 percent shareholding.
"A group like Mediaset is a cornerstone for everyone willing
to set up a media platform, with strong focus on southern
Europe," wrote Mediobanca Securities analyst Fabio Pavan.
Sources close to the matter said that Vivendi might be
betting on divisions opening up among the Berlusconi family, but
Berlusconi himself said that he and his family would be united
in fighting any Vivendi move to weaken their grip on Mediaset.
"We have no intention of allowing anyone to downsize our
role as entrepreneurs," Berlusconi said in a statement.
He said that the family investment vehicle, Fininvest, which
holds 39.8 percent of Mediaset's voting rights, would also
continue to increase its shareholding.
Separately, Mediaset holds 3.795 percent of its own shares,
with no voting rights, and could raise that to a maximum of 10
Vivendi and Mediaset fell out in July when the French
company backtracked from a deal that would have handed it
control of Mediaset's pay-TV unit, Premium.
"This is certainly not the best calling card Vivendi could
show to re-propose itself as industrial partner for the group,"
Mediaset is suing Vivendi for damages and asking Milan
judges to enforce the pay-TV contract signed in April. The case
is expected to start in March.
Milan prosecutors on Wednesday opened a preliminary
investigation into alleged market manipulation after Fininvest
filed a complaint over Vivendi's stake-building in Mediaset, a
judicial source told Reuters.
A Vivendi spokesman declined to comment.
(Reporting by Agnieszka Flak and Emilio Parodi in Milan and
Maya Nikolaeva in Paris; additional reporting by Mathieu
Rosemain in Paris; Editing by Mark Bendeich and David Goodman)