December 15, 2017 / 1:03 PM / a year ago

UPDATE 1-Italy's Mediaset wins approval for board changes, squeezing Vivendi

(Recasts with approval of governance changes, adds Amber comment)

By Giulia Segreti and Giancarlo Navach

MILAN, Dec 15 (Reuters) - Mediaset shareholders on Friday approved governance changes that could stem the influence of France’s Vivendi, the private Italian broadcaster’s second largest investor.

Shareholders of the Milan-based TV group, which is controlled by Italy’s former prime minister, Silvio Berlusconi, voted on a proposal to cut the maximum number of board seats to 15 from 21 and to change the way its members are appointed.

The new rules are expected to grant Mediaset’s board greater stability, as they strengthen Berlusconi’s grip on the company, but the new governance will leave minority shareholders, including Vivendi, with only two or three seats.

The move is the latest twist in a bitter dispute between the two groups who are now facing off in court after Vivendi’s unexpected decision last year to pull out of a deal that would have handed it control of Mediaset’s pay-TV unit.

After its u-turn, Vivendi quickly built a 28.8 percent stake in Mediaset, in which Berlusconi’s family holding owns a 39.5 percent stake.

The Italian government has expressed concern over the growing influence of Vivendi, which also holds a 24 percent stake in Telecom Italia (TIM).

The new rules on governance were approved with a majority well above the two-thirds required. Just under half of Mediaset’s capital attended the meeting.

Vivendi was not present at the meeting, a shareholder said, confirming what two sources told Reuters on Thursday.

Fininvest had already said it voted for the new rules but proxy adviser Glass Lewis had recommended shareholders vote the other way “given the potential for the amendment to entrench Fininvest’s control of the board”.

Amber Capital, which holds a share of just over 2.5 percent in Mediaset, said it was against the changes as they would have “a negative impact on the company and on the rights of minority shareholders”, according to a note by the investment fund.

“It is not acceptable that Vivendi’s presence and conducts... are today the excuse to introduce a hidden poison pill which irreparably damages (the rights) of minority shareholders,” the note added.

Reporting by Giulia Segreti Giancarlo NavachEditing by Alexander Smith/Jeremy Gaunt

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