Defeat in regional elections has made Berlusconi rethink his strategy

Berlusconi holding company Fininvest owns 50.1% of Mediaset, but now plans to sell a 16.7% stake.

The move follows Mr Berlusconi's underperformance in regional elections amid claims of a conflict of interest between his political and media roles.

Analysts had been expecting him to reduce his stake in the firm sooner.

Political fall-out

US bank JP Morgan is managing the sale of the stake, which could take several days.

Francesco Cardinali, the JP Morgan banker handling the sale, confirmed in a conference call to investors that the sale was partly politically motivated.

"The timing is following the recent poor performance of the ruling coalition in the recent regional elections," he said.

Berlusconi's centre-right coalition won in only two out of 13 regions in Italian regional elections earlier this month.

However, Mediaset shares are close to their high of 11.3 euros and analysts have long expected the Berlusconi family to sell when the shares were above 10 euros.