After a yearlong battle with Olivetti topper Carlo De Benedetti over Italy’s Mondadori publisher, tv mogul Silvio Berlusconi was handed a surprise victory Jan. 24 by the Rome Court of Appeals. The ruling reversed a previous decision by the court of Milan.
Dispute for control of Italy’s largest publisher, which had an estimated $1.7 billion in 1990 gross revenue, revolves around a 1988 contract in which key Mondadori stockholder Luca Formenton agreed to sell his 26.9% share in Amef – the holding company that controls Mondadori – to De Benedetti by Jan. 31 1991.
In December 1989, Formenton abruptly declared the contract void and entered an alliance with minority shareholder Berlusconi on the grounds that De Benedetti was conducting a hostile takeover of the company.
Berlusconi is said to have paid Formenton $250 million for the 13 million Amef shares.
Though a Milan court upheld the contract earlier this year, the Rome ruling declared the 1988 agreement invalid – giving Formenton and cousin Leonardo Mondadori carte blanche to form the alliance with Berlusconi. The trio now possesses 65% of Amef.
Rome Court of Appeals judges Vittorio Metta and Giovanni Paolini ruled that the 1988 De Benedetti-Formenton pact violated Italian corporate norms governing stockholders meetings. De Benedetti and his lawyers issued a statement saying they are “still convinced of the validity of the contract” and will appeal to the Court of Cassation.
The Mondadori empire – owned, until recently, by descendants of founder Arnaldo Mondadori – includes 16 daily papers, 35 periodicals and an output of 2,000 new books a year.
Though an anti-trust clause in the recently-passed tv law prohibits Berlusconi from owning a daily paper (much less 16 of them), the tv mogul is expected to reach a compromise with De Benedetti enabling the former to retain control over the periodical and book publishing divisions.
If Berlusconi attempted to retain control of Mondadori in its present form, the Ministry of Post and Telecommunications could black out his three national networks after the law goes into effect in April 1992.
De Benedetti would keep influential daily La Repubblica, weekly newsmag Panorama and the other daily papers. For the time being, neither Berlusconi or Formenton is expected to become personally involved in managing the publishing house.