Mediaset faces Vivendi and ISS opposition to merger plan

Mediaset is facing shareholder opposition to its plans to merge with its Spanish offshoot and create a new pan-European holding company based in the Netherlands, with Vivendi and proxy advisory firm ISS indicating they will oppose the proposal.

Mediaset shareholders are set to meet on September 4 to vote on the plan to create the new MediaForEurope holding company.

According to Bloomberg, citing unnamed sources, Vivendi plans to vote against Mediaset’s plan to merge with Mediaset España.

It is believed that Vivendi sees the plan as part of a move by the Berlusconi family to assert its control over Mediaset.

According to Bloomberg, it is unclear whether Vivendi can muster the votes to secure the two-thirds majority that would stymie the Italian broadcaster’s plans. Vivendi holds a 9.6% stake in the broadcaster directly, with a further 20% held by Simon Fiducaria as an independent trust to meet Italy’s TUSMAR rule that prevents entities from simultaneously holding large stakes in media and telecom companies.

If Mediaset’s plans secure a green light from shareholders, Vivendi and other shareholders will have to decide whether to tender their shares to MediaForEurope or sell out. Mediaset has only offered €2.77 per share to stockholders that don’t want to participate, which is below the current price of the company’s shares.

ISS has already indicated it is minded to oppose the merger. While ISS accepts the rationale for the plan it is of the view that it raises significant governance issues and could reduce the rights of minority shareholders. The structure envisaged by Mediaset would involve long-term sharholders being given double voting rights, which observers believe is designed to cement the Berlusconis’ control of the company.

In July, Mediaset was forced to accept demands both from Vivendi and Simon Fiducaria to have their rights as voting shareholders recognised following a judicial process. Mediaset had previously claimed that neither company qualified because Vivendi had acquired its shares in the company illicitly.

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