French conglomerate Vivendi is gearing up for a showdown with Mediaset, the media empire controlled by former Italian prime minister Silvio Berlusconi, over a proposed mega-merger.
Mediaset shareholders will vote on Wednesday over plans to combine the company’s Italian and Spanish businesses into a new European media giant.
Vivendi, which holds a 30 per cent stake in Mediaset, has said it will vote against the merger, which would create a Dutch-listed holding company called Media for Europe.
“This is because the group has assessed the rights, or lack of them, that minority shareholders and particularly Vivendi would have under the proposed Media for Europe bylaws,” Vivendi said in a statement.
The French owner of Universal Music and Canal Plus has secured approval from an Italian court to attend and vote at Mediaset’s extraordinary general meeting this week.
However, Vivendi’s direct voting rights equate to just 10 per cent, meaning it will need significant support from other shareholders to block the two-thirds majority required by Mediaset.
The dispute is the latest sign of tension between Berlusconi’s empire and Vivendi, which is controlled by French billionaire Vincent Bollore.
The two firms first came to blows in 2016, when plans for Vivendi to snap up Mediaset’s pay-TV arm collapsed, sparking allegations of market manipulation by the Italian group.
In addition, roughly 19 per cent of Vivendi’s shareholding is held in trust due to competition concerns over the company’s stake in Telecom Italia.
Mediaset is thought to be plotting the merger in a bid to strengthen its resources amid growing competition in the media landscape from streaming services such as Netflix.
But Vivendi has argued that the move represents Berlusconi’s efforts to increase his control over Mediaset through holding company Fininvest.
Vivendi said proposals to favour long-term shareholders in the merger could give Fininvest as much as 86 per cent of total voting rights on its stake of roughly 40 per cent.
Shareholder advisory group ISS has recommended that other shareholders also vote against the merger plans.
Main image credit: Getty