Italian Prime Minister and media magnate Silvio Berlusconi weighed into the battle for RCS Mediagroup on Tuesday, denying reports he was behind a raid on the publisher of leading newspaper Corriere della Sera.
Billionaire Berlusconi had been linked to stake-building in RCS by the centre-left opposition and newspapers which said he wanted to gain sway at Corriere della Sera, the most reputable voice in a country dominated by his family's media empire.
"It is incredible to me that people try to build castles in the air and lies like those we have seen in the past few days in the newspapers regarding ... my involvement in the raid on RCS," Berlusconi said in a rare statement.
The tussle for RCS and Corriere della Sera has taken on a resonance similar to that felt in Britain in 1981 when Rupert Murdoch's News Corp took control of The Times of London, which critics viewed as an attack on media independence.
RCS has long been fodder for power play in Italy but a raid on its shares by hitherto unknown entrepreneur Stefano Ricucci has brought about a battle for its ownership on the eve of general elections where media control will be a major issue.
Ricucci has amassed a stake of nearly 21 percent in RCS and in a weekend newspaper interview said he and his allies intended to buy at least another 8-9 percent.
Berlusconi denied that his relationship with Ricucci's banker Ubaldo Livolsi, who used to work at Berlusconi holding company Fininvest, meant he was behind stake-building.
But left-wing lawmakers, who maintain Berlusconi's control of private broadcaster Mediaset helped him to win 2001 elections, said Corriere was Berlusconi's "obsession". "Since Berlusconi entered politics he has done nothing but try to influence or buy Corriere. In this government, the phenomenon has reached feverish proportions," Euro deputy Enrico Letta said in an interview with Corriere on Tuesday.
Berlusconi's denial also failed to curb the stock's rise as traders bet a pact between industrialists who control RCS - and are entrusted with ensuring its editorial autonomy - could unravel, opening the way for Ricucci to raise his stake.
The stock traded up 2.2 percent at 6.4 euros by 1400 GMT, outperforming a flat DJ Stoxx index of European media, having risen 40 percent in six months on bid speculation.
A source close to the deal told Reuters that Gemina, one of the group of core shareholders that controls 58 percent of RCS, was seeking to sell its one percent stake. "It seems the pact is beginning to pull at the seams," one Milan-based trader said.
The pact, which includes industrial groups Fiat and Pirelli , have tried to close ranks against any bid by agreeing to offer their stock to each other if any of them wants to sell. Analysts have questioned the legality of the deal.
Newspapers have reported Ricucci, who is also embroiled in a messy takeover battle at Banca Antonveneta, could bring in an overseas investor to help him seize RCS, which has a market capitalisation of 4.9 billion euros.
Spanish group Vocento "roundly denied" reports it could be interested in acquiring part of RCS, which also owns Spain's El Mundo and French publisher Flammarion.
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