Rivals Can Wind up Partners in Italian Media Company

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ROME ( -- Marco Benatti and his former employer, WPP Group, may end up locked in an uneasy partnership as the two biggest shareholders in Italian media company FullSix, even as they pursue lawsuits against each other.

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Mr. Benatti’s efforts to acquire control of FullSix started with a whimper, with zero shares tendered over the first four days of the sale. After exercising some stock options he possessed, Mr. Benatti’s stake in FullSix rose slightly this week to 44%, while WPP’s share of the company remains at 26%. The share offer, which opened Feb. 27, continues until March 17.

Mr. Benatti was fired Jan. 9 as Italy country manager for WPP. Since then he and WPP's chief executive, Martin Sorrell, have filed lawsuits against each other in what has become a high-profile case that seems sure to drag on for months. (WPP charges that Mr. Benatti did not report a direct stake in MediaClub, a company acquired by the holding company, and funneled WPP clients to FullSix. Mr. Benatti is suing WPP and Mr. Sorrell for defamation of character.)

Control over FullSix has been one of the main proxy battles between the two onetime friends.

Because his stake in FullSix topped 30% in January, Mr. Benatti was legally obligated to make an offer for all the outstanding shares in the company. But with public attention over the deal pushing prices for FullSix shares to nearly 10 euro ($12.15) in recent days, Mr. Benatti's offer of 8.14 euro ($9.89) per share is below the market price and so is unlikely to garner much attention.

Meanwhile, WPP is mum about its intentions for its stake in the company. Its share of FullSix has inched higher in recent weeks but is still short of the 30% level that would require it to also make a bid for the entire company.

'De facto control'
“It looks like Benatti has the stronger hand, because even if he does nothing and he ends up with a 44% stake, he still has de facto control over the company,” said Marco Maximilian Elser, CEO of Advicorp, a Rome-based institutional investment bank. “WPP, on the other hand, has to decide if it wants to sell its share, or get in a bidding war with Benatti, or just do nothing and end up being partners with him.”

A spokesman for Consob, the Italian stock market regulator, warns not to rule out some dramatic development near March 17, the end of the tender offer.

“I have seen enough of these offers to know that it’s not unusual for more to happen in the last few hours of the offer than over all the previous weeks combined,” the spokesman said.

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