By Nick Kostov 

PARIS -- Vivendi SA Chairman Vincent Bolloré dramatically raised the stakes in his showdown with Silvio Berlusconi, threatening to increase Vivendi's stake in Mediaset SpA to a level that would set off a bare-knuckled battle for control of the Italian TV company founded by the former Italian prime minister.

Vivendi, the French film, TV, telecoms and videogame giant, said it was ready to buy up to 30% in Mediaset SpA -- the legal threshold before an investor is required to launch a takeover offer for all shares outstanding.

Vivendi, has been snapping up shares in Mediaset at a steady clip. Last week, after a long-running contractual dispute over a failed partnership between the two media giants, Vivendi started buying up Mediaset shares, spending EUR800 million ($860 million) to build a 20% stake.

A further stake increase by Vivendi significantly raises the ante on the Berlusconi family in its battle retain control of the company. Italian law restricts the family from quickly raising its stake by more than 5% each year without launching its own offer for all shares outstanding.

Fininvest, the family holding company, recently raised its ownership to 38.3% of Mediaset from 35% in response to Vivendi's advances. As a result, the family can't buy any more shares until April, and then can only raise its stake another 2 percentage points.

Mr. Bollore also has a reputation for creeping takeovers, gradually accumulating large stakes in companies that allow him to call the shots in the boardroom without making an actual takeover bid.

Fininvest said earlier on Monday that it had filed a market abuse complaint against France's Vivendi with national market authority Consob. It had already lodged a criminal complaint in Milan against the French company for market manipulation last week.

In a statement, Fininvest said that "Vivendi continues with a very aggressive strategy" that confirms the irregularities already set out by Fininvest. The Berlusconi family holding added that more legal action would follow.

Vivendi's latest maneuvering defies warnings from the Italian government who lamented the "hostile" stake-building. The purchases also provide Vivendi with more leverage in a key contract dispute with Mediaset that started the conflict.

Eight months ago, the two companies signed a cross-shareholding agreement that would allow Mr. Bolloré to further expand his empire into Italy by acquiring Mediaset's pay TV business. Vivendi has been on an acquisition binge aimed at building a media empire focused in southern Europe. But the deal fell apart after Vivendi soured on the value of the pay-TV unit.

Mediaset filed a lawsuit demanding that an Italian court enforce its agreement with Vivendi for the sale. On Friday, Chief Executive Arnaud de Puyfontaine and his counterpart at Mediaset's Chief Executive Pier Silvio Berlusconi, Mr. Berlusconi's son, met for 15 minutes in Milan.

In that meeting, Mr. Berlusconi refused to withdraw the lawsuit, saying "not before we get the damage compensation" for not respecting the contract, according to a person close to Mediaset.

A person close to Vivendi said that Mediaset isn't making any effort to resolve the conflict. "All the time, it's very bellicose," the person said.

Manuela Mesco contributed to this article.

Write to Nick Kostov at Nick.Kostov@wsj.com

(END) Dow Jones Newswires

December 19, 2016 16:24 ET (21:24 GMT)