Fiat eye stake in Corriere publisher

Fiat eye stake in Corriere publisher
On Friday Fiat said it is looking to almost double its stake in RCS Mediagroup. Photo: Geoff Robins/AFP
Trading in RCS Mediagroup, the publisher of Italy's best-selling newspaper Corriere della Sera, was suspended on Monday after its price soared on the news that auto giant Fiat could become its biggest shareholder.

Trading was suspended after the company stock shot up 25.91 percent to €1.73.

On Friday, Fiat said it is looking to almost double its stake in RCS from 10.5 percent to 20.1 percent following a €400 million capital increase which ends July 5th.

The transaction would see Italy's Agnelli family extend its reach into the news business.

Investors hailed the news, which is likely to boost the value of the debt-laden RCS and permit the company to launch a turn-around plan.

Fresh developments regarding the capital hike are expected to come this week, with analysts in particular watching closely to see whether Italian businessman Diego Della Valle, who owns a 8.7 percent stake in the group, will take part.

Fiat chairman John Elkann, who in May joined the board of Rupert Murdoch's News Corp, on Monday refuted Italian media reports of a possible alliance with the Australian-born media baron.

"Today, the objective is to give RCS a structure which allows it to be the great Italian editorial group that it is. Today, the most important thing is guaranteeing stability," Elkann was quoted as saying by Italian media.

RCS will use the fresh capital to offset losses and is laying off employees and selling assets. The company reported a net loss in the first quarter of €107.1 million.

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