UPDATE 2-Mediaset plans to move legal base to the Netherlands, drop loyalty share scheme

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MILAN, April 26 (Reuters) - Mediaset said on Monday it would ask shareholders to approve moving the Italian broadcaster’s legal headquarters to the Netherlands in a fresh effort to pursue international expansion.

Mediaset was previously forced to shelve plans to set up a Dutch holding company that would make it easier for the group to seek European tie-ups because of opposition from its second-biggest investor, Vivendi, which fought the project in courts across Europe.

In an apparent offer of an olive branch to Vivendi, Mediaset also said it would ask shareholders on May 27 to scrap a loyalty share scheme that Vivendi had challenged in court.

The group, which is controlled by the family of former Italian Prime Minister Silvio Berlusconi, said it was seeking to “establish a constructive dialogue” with its shareholders.

Mediaset and Vivendi have been at loggerheads since a failed pay-TV deal in 2016. Two people close to the matter said the groups were making a fresh attempt to resolve their dispute.

After walking away from an accord to buy Mediaset’s pay-TV unit, Vivendi built a stake that the Italian group considers hostile. Vivendi is also the leading investor in Italy’s biggest phone group Telecom Italia.

Italian regulators had forced the French firm to transfer two-thirds of its 29% Mediaset stake to a trust, which was then barred from voting at shareholders meetings, but two court rulings late last year handed Vivendi back full voting rights.

Backing from the French group is now essential to push through extraordinary resolutions such as the decision to move the headquarters to the Netherlands, which will be voted on on June 23.

The legal dispute with Vivendi has complicated Mediaset’s plans to develop a European growth strategy, which it sees as crucial to tackle competition from streaming services like Netflix and Amazon Prime.

Mediaset on Monday said operating profit last year fell to 269.7 million euro ($326 million) from 354.6 million euros in 2019, hit by the COVID-19 crisis which was only partially offset by cost cuts and a recovery in domestic advertising sales in the second half of 2020. ($1 = 0.8272 euros) (Reporting by Elvira Pollina; editing by Valentina Za and Sonya Hepinstall)