VIVENDI will lodge an appeal after a Milan judge rejected its request to suspend a planned reorganisation at Italy's Mediaset, the French media group said yesterday.

Controlled by the family of former Italian prime minister Silvio Berlusconi, Mediaset in September approved a merger of its Italian and Spanish units under a Dutch holding company Mediaforeurope (MFE).

But Vivendi, led by French billionaire Vincent Bollore and a major shareholder in Mediaset, is fighting the project in courts across Europe, saying the governance structure of the new entity would strengthen the Berlusconis' grip on the company.

The two feuding companies responded to the decision in contrasting ways yesterday.

Vivendi said it would appeal against the ruling, while Mediaset said the MFE project was "confirmed and will go ahead".

As things stand, the reorganisation remains on hold because a Spanish judge last year ruled in favour of Vivendi's request to suspend it. The Milan judge's decision could help the Italian broadcaster to overturn the suspension in Spain.

Mediaset wants to use the new holding company to pursue tie-ups with other European peers, in a bid to create a pan-European TV champion to tackle growing competition in the industry from streaming rivals such as Netflix.

Mediaset faces a March deadline to see its Dutch holding company plan through, otherwise the decisions of a September shareholder meeting that approved the project will no longer be valid based on existing Dutch laws.

Mediaset's deadlock with Vivendi has sent shares down nine per cent since the start of the year.

Reuters

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