June 19, 2017 / 3:03 PM / a year ago

UPDATE 1-Vivendi appeals against order to cut stake in Telecom Italia or Mediaset -source

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MILAN, June 19 (Reuters) - Vivendi has appealed against an Italian regulator’s ruling demanding that the French media group reduce its stake in either Telecom Italia or broadcaster Mediaset, a source close to the matter said on Monday.

Italian communications regulator AGCOM said in April that Vivendi’s stake-building was in breach of rules designed to prevent a concentration of power in the country’s telecoms and media sector.

Vivendi is the biggest single shareholder in Telecom Italia, with 24 percent, and recently acquired 28.8 percent of Mediaset, Italy’s biggest private broadcaster.

At the time of the ruling the authority did not say how much Vivendi must divest in either company but asked the French group to present a “specific plan of action” within 60 days, a deadline that expires this week.

Sources told Reuters this month that Vivendi planned to cap its Mediaset voting rights at just below 10 percent pending the outcome of its appeal.

The sources said Vivendi would argue that it does not control Mediaset and that AGCOM’s ruling is an obstacle to a broader, sector-wide convergence between media and telecoms businesses.

While the market has been speculating which stakes Vivendi will reduce, sources said that the group’s plan was to keep both as part of efforts to establish a southern European media empire. (Reporting by Stefano Rebaudo; Writing by Agnieszka Flak; Editing by David Goodman)

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