RCS investor Della Valle ready to increase stake

MILAN Thu Jul 4, 2013 2:40pm EDT

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MILAN (Reuters) - RCS Mediagroup (RCSM.MI) investor Diego Della Valle is ready to increase his stake in the Italian publisher via a rights issue that could put him on a collision course with Fiat FIA.MI.

Della Valle, the head of Italian luxury goods group Tod's (TOD.MI), said on Thursday he may buy up unexercised options in RCS's 421 million euro ($543.66 million) rights issue, which ends on Friday, increasing his stake to over 20 percent.

Such a move would give him a stake rivaling Italian carmaker Fiat FIA.MI, which said last week it would double its stake in the group to 20 percent after the capital increase.

The surprise move by Fiat averted a looming power vacuum at RCS that could have threatened the company's survival if future shareholders disagreed on how to bring it back to profit.

RCS, which publishes the influential newspaper Corriere della Sera, has approved the rights issue to remain as a going concern after incurring losses on a debt-financed acquisition in Spain and weak advertising and circulation sales in recession-hit Italy.

Della Valle, who has on several occasions criticized Fiat management, has expressed opposition to the rights issue and accompanying restructuring plan but has never said he would vote against it.

On Thursday the businessman said he would subscribe his share of the rights issue on Friday and could take up rights not exercised by the banks in the guarantee consortium.

He said he had taken the decision because he had had assurances from the main shareholders of RCS, excluding Fiat, that governance at the group and the business plan would change.

RCS is in the process of a restructuring that includes asset sales and job cuts as well as the rights issue.

Fellow shareholders tire maker Pirelli (PECI.MI) and investment bank Mediobanca (MDBI.MI) said on Thursday they had subscribed to the RCS cash call.

(Reporting by Claudia Cristoferi Additional reporting by Isla Binnie, Writing by Stephen Jewkes; Editing by Eric Beech)

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