Milan

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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