Vivendi urges Mediaset to revoke loyalty share scheme

MILAN (Reuters) - Italian broadcaster Mediaset SpA MS.MI said on Tuesday that hostile shareholder Vivendi SA VIV.PA demanded a new extraordinary shareholders' meeting to revoke resolutions approved in April, a move that could pave the way to another chapter in a legal dispute between the two companies.

FILE PHOTO: The Mediaset tower is seen in Cologno Monzese neighbourhood Milan, Italy, April 7, 2016. REUTERS/Stefano Rellandini/File Photo

Mediaset shareholders’ meeting approved on April 18 a loyalty share scheme that rewards longer-term investors with additional votes under an Italian law that is traditionally used by controlling shareholders to strengthen their grip on companies. Under the new scheme, investors will have two voting rights for each share held for at least 24 straight months.

The Italian broadcaster is controlled by the family of former Prime Minister Silvio Berlusconi.

Vivendi declined to comment.

Mediaset has been embroiled with Vivendi, the French media conglomerate controlled by Vincent Bollore, since 2016 when Vivendi pulled out of a deal to buy Mediaset’s pay-TV unit.

After the failed pay-TV sale, Vivendi built a stake of 29 percent in Mediaset but was later forced by Italian regulators to transfer most of its voting rights into a trust because of antitrust concerns.

As Mediaset considers Vivendi’s stake illegitimate, its board prevented both the French group and the trust in which it has transferred most of its stake to vote at April’s shareholder meeting.

Vivendi could be excluded from voting at shareholder meetings of a new Amsterdam-based TV company the Italian broadcaster is establishing, according to a bylaw of the new holding.

Mediaset earlier this month unveiled a corporate overhaul that includes putting the group and its separately-listed Spanish unit under a new Dutch holding company as part of a pan-European growth strategy.

Vivendi could potentially scupper the corporate overhaul if it exercises its right of withdrawal for its whole stake as Mediaset has set a ceiling of 180 million euros on the cash outlay for the option, well below the Vivendi stake.

The board of directors of Mediaset will duly consider the request with a view to taking the relevant decisions, the company said in a statement.

Reporting by Gianluca Semeraro and Elvira Pollina; editing by Grant McCool