The media group Lagardère has put its 20% stake in French pay-TV provider Canal+ up for sale.
Lagardère is exercising a put option to sell the stake that has a time window running from March 15 to April 15 every year through to 2014. It triggered this…
The media group Lagardère has put its 20% stake in French pay-TV provider Canal+ up for sale.
Lagardère is exercising a put option to sell the stake that has a time window running from March 15 to April 15 every year through to 2014. It triggered this option just one day before it was due to expire for 2010.
The natural buyer for the stake is entertainment conglomerate Vivendi, which has an 80% holding in Canal+ and first right of refusal on the Lagardère stake.
Vivendi recently upped its stake in Canal+ from 65% through the purchase of a combined 15% holding in the company from the broadcasters M6 and TF1. It has openly stated its desire to gain direct control over the platform.
The one impediment to any deal is likely to be price. Lagardère has not announced a minimum sum, but it is likely to be around E1.2-E1.4bn.
Vivendi paid M6 E384m for 5.1% of Canal+, and paid E744m for the stake held by TF1. Both of those prices were inflated due to the transactions taking place under prearranged pricing terms.
If talks between Lagardère and Vivendi broke down, Lagardère would have the option to initiate a public listing of its Canal+ shares.
JPMorgan and BNP Paribas are advising Lagardère. The group has not announced what it will do with the proceeds of any Canal+ deal. An influx of capital could be used to reduce its E1.82bn debt, or allow it to make acquisitions its leverage level currently prohibits.