Berlusconi buys into Premiere

Italian prime minister Silvio Berlusconi has become a shareholder in Premiere, joining News Corp as a new investor in the German pay-TV operation.

Silvio Berlusconi’s family investment vehicle Fininvest has picked up 3.13% of Premiere’s shares, helping send Premiere’s share price up a massive 32% in Frankfurt trading Monday.

Berlusconi actually bought the shares 10 days ago on November 14, but the news emerged with a regulatory filing on Nov 24. News Corp holds a 25% stake in Premiere.

Initial speculation that the media entrepreneur could pursue a strategic interest in Premiere appears to be erroneous. A Fininvest spokeswoman explained in Rome that the investment was a “small engagement” in the process of diversifying the company’s investments. She added that the stake in Premiere has been built up over the previous 12 months due to the “interesting share course” and claimed it had “no strategic meaning”. According to sources close to the parties involved, Fininvest intends to keep the stake at between 3% and 5%.

After the announcement of Berlusconi’s entry on 24 November Premiere’s shares shot up by more than 32 per cent and finished trading at €3.74. Investors are obviously speculating that Berlusconi will purchase more shares, with the billionaire’s investment serving as a vote of confidence in the troubled broadcaster.

Premiere’s largest single shareholder is currently Rupert Murdoch’s international media concern News Corp, holding a 25.01% stake. The rest of the shares are listed on the stock market where they are held by private and institutional investors as well as Premiere’s top-tier management and supervisory board members.

A News Corp spokesman declined to elaborate on Berlusconi’s entry into the broadcaster.