(Adds Vivendi declined to comment)
By Giulia Segreti
PARIS, Dec 14 (Reuters) - 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 percent.
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," Berlusconi said.
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)