MILAN (Reuters) – One of the sons of industrialist Carlo De Benedetti rejected his father’s “painful” attacks on his and his brother’s management of GEDI Gruppo Editoriale, saying they were committed to the group behind some of Italy’s top dailies after a sharp slide in quarterly earnings.
Last week De Benedetti, a veteran of the Italian business scene who chaired GEDI <GEDI.MI> for a decade, offered to buy a 29.9% stake as part of a two-stage relaunch plan. At the same time, he launched a blistering attack on his sons Marco and Rodolfo who have run the publisher of the La Repubblica and La Stampa newspapers for the past seven years.
After launching the bid, De Benedetti told the Corriere della Sera newspaper that his sons had “neither the skills nor the passion required to be publishers” and had concentrated solely on looking for a buyer.
“The interview contains an attack on my brother Rodolfo and myself, a subject that is painful for us, which is on a personal level and on which I do not wish to comment”, Marco De Benedetti wrote in a letter sent to staff on Monday.
“We are not a wreck of a group, we do not need to be restructured, we are not a rudderless ship,” he added.
The dispute between De Benedetti and his sons has transfixed corporate Italy, combining family drama with a battle to control some of the country’s best known newspapers, which like their counterparts across the world have struggled to meet challenges from social media and declining advertising revenues.
Earlier on Monday, the publisher reported a sharp decline in net profit in the third quarter to 0.7 million euros from 3.5 million euros ($3.91 million) a year ago and said it did not expect any significant changes in market trends for the full-year.
The company’s shares fell almost 9% after the results before trimming losses to close 6% lower.
In a statement accompanying the results, GEDI’s board said it was taking appropriate measures to face challenges in the media sector.
“The GEDI Group maintains a solid leadership in daily newspapers, digital media and radio, and adopts measures capable of facing the future, investment and development, and creating sustainable value”, it said.
De Benedetti transferred his stake in holding company CIR <CIRX.MI>, which controls nearly 43% of GEDI, to his three sons, Rodolfo, Marco and Edoardo, seven years ago but has been disappointed by the group’s performance since. Edoardo does not hold an executive role.
De Benedetti’s plan envisages strengthening the company’s management and investments in digital. A subsequent step would see him handing his shares to a foundation — including journalists, managers and individuals from the cultural sectors — and convincing other shareholders to do the same, he told Corriere della Sera last week.
De Benedetti took a stake in centre-left daily La Repubblica soon after it was launched in 1976 and was associated with the newspaper for decades. GEDI, which emerged from the L’Espresso group behind La Repubblica, merged with the publisher of the Turin daily La Stampa in 2017.
Exor <EXOR.MI> the holding group of Italy’s Agnelli family has a stake of nearly 5% in GEDI, according to the latest Consob filings.
(Reporting by Gianluca Semeraro and Giancarlo Navach, editing by James Mackenzie and Kirsten Donovan)