MILAN (Reuters) - Leading proxy adviser ISS recommended shareholders in broadcaster Mediaset (MS.MI) vote against changes to the bylaws of a Dutch holding company into which the TV group wants to merge its Italian and Spanish businesses.
Mediaset is proposing to change the bylaws in a bid to address concerns that the reorganization, aimed at creating a pan-European TV platform, harms the interests of minority shareholders - a stance backed by Mediaset’s second biggest investor Vivendi (VIV.PA).
ISS said in a document seen by Reuters that the new holding would “overall decrease minority shareholder rights” even after the planned amendments.
“Despite the positive changes proposed, we note that the main concerns about the merger have not been addressed”, ISS said.
The Dutch entity would keep a loyalty voting structure helping Fininvest, the holding company of former Prime Minister Silvio Berlusconi, tighten its grip on the group, ISS said.
Mediaset wants to use the new company, dubbed MediaforEuorpe (MFE), to pursue pan-European tie-ups to take on increasing competition in the industry and stalling growth in its domestic market. Vivendi is challenging the planned reorganization in court.
Shareholders are due to vote on the proposed changes to the bylaws, which Mediaset introduced to comply with indications of a Milan-based court, on Jan. 10.
Earlier on Friday, another proxy adviser, Glass Lewis, recommended shareholders vote in favor of the changes.
Reporting by Elvira Pollina, editing by Silvia Aloisi