RCS Mediagroup stock soars after Fiat swoops on options

Watchdog may force shareholder pact to make public takeover bid

RCS Mediagroup stock soars after Fiat swoops on options

Milan, July 2 - The Milan stock exchange on Tuesday suspended trading in RCS Mediagroup after shares of the financially troubled Italian publisher soared 13.87% in little more than 30 minutes on news that a public takeover offering could be imposed on certain company shareholders. RCS - owner of Italy's largest paper of record, Il Corriere della Sera, among other assets - is proceeding on a 400-million-euro capital increase and faces bankruptcy unless it successfully raises new capital. RCS shares went haywire on news Friday that automaker Fiat, a minority shareholder, was seeking the ability to increase its stake from 10% to a possible 20%, acquiring the options on the open market as well as roughly 3% worth from other participants in RCS's majority-shareholder-pact, to which Fiat belongs. In April, Fiat Chairman John Elkann said Fiat would participate in the capital-increase operation being organized by RCS, but taking a 20% stake would make Fiat the largest single shareholder of RCS. Italian stock-market watchdog Consob is now assessing whether to force Fiat and the other participants in the 58% majority-shareholder pact to make a public takeover bid. RCS presented in April a three-year turnaround plan, which includes a 400-million-euro capital increase and the goal of selling off 250 million euros' worth of non-core assets by the end of 2014. Shareholders approved the capital increase on May 30. Fiat shares were down 0.9% on Monday, and continued to slip 1.64% on Tuesday. RCS shares were up 6% on Tuesday after trading resumed.

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