MILAN (Reuters) - Italy’s biggest private broadcaster, Mediaset, plans to reward its longer-term investors with additional votes under an Italian law that is traditionally used by controlling shareholders to strengthen their grip on companies.
The group, controlled by the family of former prime minister Silvio Berlusconi, said in a note to its 2018 results on Tuesday it proposed to utilize the law, which gives more voting power to investors who pledge to hold the stock for at least two years.
The same law has been used in recent years by Fiat Chrysler’s Agnelli family and Campari’s Garavoglia family.
A source close to Mediaset denied the move was aimed at hostile shareholder Vivendi, the French media group that made a share raid on Mediaset in 2016 but was forced by regulators last year to transfer most of its stake into a trust. Vivendi and Mediaset are locked in a bitter and protracted legal battle.
The source said the proposal simply aimed to improve governance at Mediaset by rewarding long-term investors and adding stability to the shareholder base. Mediaset shareholders will vote on the proposal at its annual meeting on April 18.
On Tuesday, Mediaset reported a 4 percent fall in 2018 net revenues, roughly in line with market forecasts. Despite predicting an improvement in operating profit this year, it painted a challenging outlook given the weak Italian economy.
“This limits visibility regarding the possible outlook in the advertising market in the coming months, in a general context that will also be characterized by the outcome of the European elections at the end of May,” the company said.
Full-year 2018 advertising revenue totaled 3.4 billion euros, roughly in line with analysts’ consensus estimate of 3.38 billion euros, according to Thomson Reuters Refinitiv data.
Earnings before interest and tax slumped 67 percent to 73.7 million euros.
Additional reporting by Gianluca Semeraro; Editing by Mark Bendeich