French media company Lagardere group announced it has decided to postpone the IPO of its 20% stake in satellite broadcaster Canal+ France citing the volatility in the markets stemming from the earthquake in Japan.
The listing on the NYSE Euronext in…
French media company Lagardere group announced it has decided to postpone the IPO of its 20% stake in satellite broadcaster Canal+ France citing the volatility in the markets stemming from the earthquake in Japan.
The listing on the NYSE Euronext in Paris was expected to take place at the beginning of April. But in a statement Lagardere said that it would postpone the listing although it reaffirmed its intention to soon sell its interest in Canal +, reportedly valued at between ?1bn and ?1.5bn.
This delay could, however, allow French media and telecoms group Vivendi, which owns the remaining 80% in the broadcaster through its subsidiary the Canal+ Group, to bid for the stake.
Under a 2007 shareholder agreement, Lagardere has a put option to sell its 20% holding in Canal+ to Vivendi between 15 March and 15 April every year until 2014 or list it if Vivendi refuses to buy it.
Lagardere is advised by BNP Paribas and JPMorgan, and Vivendi by Nomura and Societe Generale.
Vivendi chairman Jean-Bernard Levy was quoted saying earlier this month that his group ultimately sought to own 100% of Canal+ France. He reportedly said that talks to buy Lagardere’s stake have failed because of a difference in price expectation, but pointed out that Lagardere was able to stop the listing process at any point.
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.
?1.5bn would broadly equate to the amounts Vivendi has spent for other stakes in Canal+ France. In November 2009, for instance, it agreed to acquire the 9.9% stake in Canal+ France held by French media holding company TF1 for ?744m.
However, TF1 reportedly had an option that guaranteed a minimum price for its stake. Lagardere’s shareholder agreement does not have such an option attached.
If Lagardere is attempting to get a higher value by floating the stake, it may be thwarted by the size of Vivendi’s own stake, which would leave any incoming investors with only a limited say in the strategy of the company.
Both Lagardere and Vivendi have been involved in significant transactions in recent months that may offer the chance to break the deadlock, as Vivendi now has additional funds that could be used for acquisitions.
Lagardere agreed to sell its international magazine business to Hearst Corporation for ?651m at the end of January.
Meanwhile, Vivendi announced on 26 January that it had sold its remaining 12.34% stake in the US broadcaster NBC
Universal to General Electric for US$3.8bn.
