October 11, 2019 / 12:01 PM / 10 days ago

Spanish court puts Mediaset's pan-European plan on hold

MILAN/MADRID (Reuters) - A Spanish court has temporarily halted a plan to merge Italian broadcaster Mediaset’s domestic and Spanish businesses under a Dutch holding company structure, pending a legal challenge by shareholder Vivendi, Mediaset Espana (TL5.MC) said on Friday.

FILE PHOTO: The Mediaset tower is seen at in Cologno Monzese, near Milan, Italy, April 8, 2016. REUTERS/Stefano Rellandini/File Photo

Mediaset’s (MS.MI) second-biggest investor Vivendi (VIV.PA) brought legal proceedings against the corporate overhaul in court because the French group sees it as detrimental to minority shareholders.

Mediaset’s reorganization plan aims to create a new entity - called MediaforEurope - in a bid to pursue pan-European tie-ups to face growing competition in the industry.

Pending a decision on Vivendi’s lawsuit, the Spanish court granted a precautionary suspension of the corporate overhaul.

“Mediaset Espana strongly disagree with this interim ruling, and will immediately appeal,” the company said, adding it was confident a higher court would reverse the decision.

“The reasons behind Mediaset Espana’s position ... are very solid and support the legal, economic and managerial rationale of the accords that have been challenged,” it said.

Mediaset said Vivendi would not stop its European growth plan.

The French group has also brought legal proceedings against Mediaset’s plan in Amsterdam and Milan courts.

In an emailed statement, a Vivendi spokesman said the group was satisfied with the Madrid court ruling.

The French group has been a hostile Mediaset shareholder since the tycoons who control the two companies, Vincent Bollore and former Italian prime minister Silvio Berlusconi, fell out in 2016 over an aborted pay-TV deal. They have been in a legal war ever since.

In Italy, Mediaset’s merger plan was approved at a shareholder meeting where Vivendi was allowed to vote only with the 9.6% Mediaset stake it owns directly.

Two-thirds of Vivendi’s 29% stake in Mediaset is held through an arms-length trust which Mediaset prevented from participating in the meeting.

By 1500 GMT shares in Mediaset Espana were down 1.2%. Shares in Mediaset were up 2.3%.

Reporting by Elvira Pollina in Milan and Jose Elias Rodriguez in Madrid; Editing by Elaine Hardcastle and Deepa Babington

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