Spanish media group Prisa said on Friday that its second-largest shareholder, Vivendi, had obtained the green light from the Spanish government to increase its stake in the publisher of the El Pais newspaper.

The Spanish government has authorized Vivendi to exchange the Prisa convertible bonds it acquired in February for shares, Prisa said in a statement.

Spain passed a law in 2020 requiring foreign companies to apply for permission to acquire major stakes in Spanish listed companies.

Prisa, heavily in debt, had sold 130 million euros worth of convertible bonds in order to reduce its debt.

Prisa stated that if Vivendi were the only bondholder to convert its bonds into shares, its stake would increase to 15%.

If Vivendi and all other convertible bondholders were to convert all their bonds, the French group would end up owning around 10.9% of Prisa, compared with the current 9.51%, according to Refinitiv data.

A Vivendi spokesperson declined to comment.

At the end of 2021, Vivendi applied to increase its stake in Prisa to 29.9%, from 9.94% at the time, as part of its plans to expand its presence in Spanish-speaking markets in Europe, Latin America and the US.

A few months later, Vivendi withdrew its request.

Vivendi had built up its stake in Prisa by first acquiring a 7.89% share from HSBC for 52 million euros.

Prisa's main shareholder is the activist fund Amber Capital, headed by French investor Joseph Oughourlian, with a 29.57% stake, according to information from Refinitiv Eikon.

(Reported by Matteo Allievi, edited by Matthieu Protard)