(Recasts lead, adds statement on Vivendi legal actions)
By Elvira Pollina
MILAN, Sept 23 (Reuters) - Vivendi is taking legal action against Mediaset's plans to reshape its future after deciding to hold on to its stake in the Italian broadcaster after a deadline to sell expired.
Mediaset this month won shareholder approval to create a pan-European media group in an effort to pursue continental alliances with rivals and fend off growing competition from streaming services such as Netflix or Amazon Prime Video.
But Vivendi, which has plans of its own to build a European media powerhouse, opposed the reorganisation saying it strengthens the hold on the group of Mediaset's top shareholder, the family of former Italian Prime Minister Silvio Berlusconi.
Vivendi could have scuppered Mediaset's plans had it decided to sell its 29% holding back to the Italian group by a deadline of midnight on Saturday.
Sources familiar with the matter told Reuters the French media giant decided to hold on to its stake and fight the corporate revamp in court.
Mediaset said on Monday Vivendi had brought legal proceedings against a shareholder meeting of its Spanish unit that earlier this month approved the merger with its parent into a Dutch holding.
It said Vivendi had also filed proceedings in the Netherlands to stop the Dutch holding introducing a number of by-laws, including one relating to special voting shares.
Mediaset and Vivendi have been locked in a legal battle since falling out over a failed pay-TV deal back in 2016.
After the aborted deal, the French conglomerate owned by billionaire Vincent Bollore built up a 29% stake in Mediaset - a holding the Italian group deems illegitimate.
Vivendi could have derailed Mediaset's revamp had it decided to liquidate its holding, which is worth more than the 180 million euros Mediaset was prepared to spend to mop up shares of investors who wanted to cash out.
Selling the stake would have translated into a loss of around 320 million euros for the French group.
To hedge against this possibility, Mediaset last week struck a deal with private equity firm Peninsula, which agreed a backstop worth up to 1 billion euros, neutralising Vivendi's withdrawal risk.
Some sources have said in the past Bollore might prefer to remain an investor in the hope that court rulings in his favour could eventually allow him to increase his sway over Mediaset.
Mediaset shares closed down 1.2% at 2.728 euros each, below the price of 2.77 euros a share at which Vivendi had the right to liquidate its stake. (Reporting by Elvira Pollina in Milan, additional reporting by Gwenaelle Barzic in Paris and Stephen Jewkes in Milan, writing by Valentina Za, editing by Deepa Babington, Jane Merriman and Sonya Hepinstall)