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CORRECTED-UPDATE 1-Mediaset shares soar after Vivendi stirs talk of takeover bid
December 13, 2016 / 9:38 AM / a year ago

CORRECTED-UPDATE 1-Mediaset shares soar after Vivendi stirs talk of takeover bid

(Corrects to add dropped “former” from Berlusconi’s title in paragraph four)

By Agnieszka Flak

MILAN, Dec 13 (Reuters) - Shares in Italian broadcaster Mediaset jumped more than 20 percent on Tuesday on the expectations of a possible hostile takeover bid by French media group Vivendi, which has declared it wants to build a 20 percent stake in Mediaset.

Vivendi, led by chairman and biggest shareholder Vincent Bollore, said on Monday that it now owns 3 percent of Mediaset and plans to raise that to 10-20 percent “to begin with”, as part of its strategy to expand into southern Europe.

Vivendi’s move has escalated a feud that began in July when the French firm backed out of an agreement that would have given it control of Mediaset’s pay-TV unit, Premium, and left the two firms with cross shareholdings.

Mediaset’s controlling shareholder, former Italian prime minister Silvio Berlusconi’s Fininvest holding company, accused Vivendi of trying to depress the company’s share price in recent months to then launch a hostile takeover at a discounted price.

Mediaset shares, which have been under pressure since the pay-TV dispute, rose as much as 26 percent to 3.44 euros, climbing back to levels they stood at before Vivendi walked away from the deal.

Vivendi shares were down 0.5 percent at 18.4 euros.

“This looks like the typical Vincent Bollore pattern ... acquire a small stake, then build it up and then look to influence the direction of the company,” Liberum analysts said in a note.

Bolloré, a key shareholder of Italian investment bank Mediobanca, has built a reputation as a corporate raider, resorting to different strategies to take control of businesses.

Vivendi is already the top shareholder at phone group Telecom Italia after gradually building up a stake of 24 percent.

Some bankers have suggested the French company may seek to combine Telecom Italia and Mediaset. All parties have repeatedly denied such speculation.

Fininvest said it did not plan to diminish its role as Mediaset’s 34.7 percent shareholder and would use all means to block Vivendi’s move.

Mediaset, which is already suing Vivendi for damages over the collapsed pay-TV deal, vowed to pursue its legal battles and would seek to assess the French media giant’s “true intentions”.

“The next hearing is in March 2017 and although the company is stating that there is no change in legal strategy, the change in ownership is likely to lead to more pressure to reach an agreement,” Jefferies analysts said. (Editing by Mark Bendeich)

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