Italy's Della Valle Says Italy Freedom At Risk at RCS Media

   By Christopher Emsden 

ROME--Billionaire businessman Diego Della Valle called for all investors in RCS Mediagroup SpA (RCS.MI), the unprofitable publisher that owns Corriere della Sera, to sell their stakes and make way for a new group of "private and free" Italians to take control of it as a pure publishing enterprise.

"Italian press freedom is in danger" due to ownership struggles at the country's largest daily newspaper, investor Mr. Della Valle said in an open letter to President Giorgio Napolitano published Tuesday.

Mr. Della Valle, who controls Tod's SpA (TOD.MI), the luxury shoemaker worth 3.5 billion euros on the Milan bourse, said in the letter: "I am writing you, president, because others aren't willing to follow this path, and we need a strong voice that's above the fray ... who can press for the modernization of the country."

He said he would expect to sell his own share in RCS, now 8.8%, but specifically said that Fiat SpA (F.NI), Mediobanca SpA (MB.MI) and Intesa Sanpaolo SpA (ISP.MI), should sell their stakes. Fiat recently doubled its stake in RCS to 20%, spending EUR100 million in what Chief Executive Sergio Marchionne, who has held back new car models and furloughed much of the work force, called "strategic."

RCS Media's recent EUR400 million capital increase, staged to avoid bankruptcy and pay down bank loans, gave existing investors a chance to increase or dilute their stakes. Fiat, Mediobanca and Intesa Sanpaolo all spent money to increase their stakes, while the Benetton family and other investors opted to be diluted.

RCS Mediagroup has long been controlled by a shareholder syndicate supported by Italy's old industrial dynasties and corporate insiders. Only 15% of the shares in the company, whose market capitalization has shrunk to below EUR600 million, have freely traded.

"The outcome of this matter isn't just about RCS but will be seen by many Italians as a strong signal as to whether people really want the country to change, or if instead the plan is to leave it in the hands of those who contributed so much to drag it into the precarious condition it lives in today," Mr. Della Valle declared in his letter.

Mr. Della Valle often engages in vocal criticism of other members of Italy's tightly-knit business elite.

Corriere della Sera has a circulation of 407,000 print copies.

--Write to Christopher Emsden at [e-mail]