(Adds trader, analyst comments)
MILAN Dec 10 Shares in Italy's largest
commercial broadcaster Mediaset outperformed a weaker
Italian market on Monday after controlling shareholder Silvio
Berlusconi said he would seek a fifth term as prime minister.
Prime Minister Mario Monti, an unelected caretaker brought
in a year ago to replace Berlusconi, said on Saturday he would
resign once the country's budget is approved.
Monti's decision came after Berlusconi's centre-right PDL
party withdrew parliamentary support for the technocrat
"Mediaset jumped at the start as investors reacted
emotionally to the government crisis and the decision of
Berlusconi to run in the election," a Milan trader said.
After rising 2 percent at the open, Mediaset shares turned
lower to fall 1.6 percent to 1.341 euros by 0937 GMT, a smaller
decline than the 3.2 percent drop in the Milan blue chip index.
Monti's decision to quit drove up the country's borrowing
costs on Monday, as markets took fright at the prospect of a
return to an old-style Italian political crisis.
An upgrade by Deutsche Bank also supported Mediaset's
shares. The broker raised its recommendation on the stock to buy
and lifted its price target by 54 percent to 2.00 euros.
"We believe Italy offers the best chance for positive macro
and advertising surprise," Deutsche Bank said.
The broker also cited potential cash-raising M&A options,
such as a partnership for its unprofitable Mediaset Premium
pay-TV business and a selling-down of its 65 percent stake in
transmission and tower business EI Towers.
(Reporting by Antonella Ciancio and Claudia Cristoferi; Editing
by Mark Potter)