The protracted sale of media group Largardere’s 20% stake in French DTH provider Canal+ France to majority owner Vivendi has finally been agreed.
The two companies announced late on 28 October that terms have been agreed for media conglomerate Vivendi…
The protracted sale of media group Largardere’s 20% stake in French DTH provider Canal+ France to majority owner Vivendi has finally been agreed.
The two companies announced late on 28 October that terms have been agreed for media conglomerate Vivendi to pay €1.02bn in cash for the 20% it does not already own in Canal+.
The agreement followed the successful outcome of the mediation led by René Ricol under the authority of the Paris Commercial Court.
Back in February 2013, Lagardere took Vivendi to court demanding that the conglomerate return €1.6bn (US$2.08bn) in cash to Canal+ France.
The claim stated that the surplus cash generated by Canal+ France was placed with its parent company Groupe Canal+, which is 100%-controlled by Vivendi, under a ‘cash management agreement’ that was not approved by Canal+ France’s supervisory board.
Though Vivendi denies this claim, in late May 2013 it accepted a proposal from the Paris Commercial Court to name a mediator in order to solve the dispute. The arbitration was extended by several weeks in early October.
Speculation regarding a deal between the two companies arose on the weekend when French media claimed that a deal had been struck for Largardere to sell its minority holding.
The reports prompted the media group to release a statement on the morning of 28 October affirming that it was in ‘ongoing discussions with Vivendi in order to find an agreement on Canal+ France’.
The agreement announced later in the day brings an end to more than five years of speculation over what Lagardere planned to do with its minority holding in Canal+ France. Under a 2007 shareholder agreement, Lagardere has a put option to sell its 20% holding in the satellite broadcaster to Vivendi between 15 March and 15 April every year until 2014 or list it if Vivendi refuses to buy it.
Lagardere first announced its intention to list the stake in July 2010, as Vivendi was said to have offered just under €1.3bn instead of the €1.5bn sought by the media company. Since then, it postponed its IPO plans several times.
The €1.02bn valuation would suggest that the two parties have finally agreed to a compromise on the price. Lagardere was rumoured to have recently valued the stake at around €1.2bn, while Vivendi had allegedly sought to pay closer to €800m.
The plan will now be submitted to the appropriate works councils for approval.
