2nd UPDATE: Lagardere To Sell Stake In Vivendi's Canal Plus France
April 15 2010 - 6:46AM
Dow Jones News
French media conglomerate Lagardere SCA (MMB.FR) said Thursday
that it intends to sell its 20% stake in Canal Plus France, in a
move that would simplify Lagardere's structure and could allow
Vivendi SA (VIV.FR) to fully own the French pay-TV channel.
Under the conditions of a Canal Plus France shareholder
agreement, Lagardere will first enter talks with Vivendi over the
stake sale. Vivendi already owns 80% in Canal Plus France, a unit
of Canal Plus Group.
Vivendi has a policy of buying out minority stakes and has
repeatedly said that it would be interested in buying out the stake
in Canal Plus France. Thursday, it said it had been informed of
Lagardere's intention to sell the stake, but declined to provide
any more details.
If Vivendi acquires the stake, it will give it 100% ownership of
Canal Plus France but if the two group fail to agree, Lagardere can
sell the stake on the market.
Lagardere has repeatedly said that it wants to sell its stake in
Canal Plus and its chief financial officer, Dominique D'Hinnin,
said late last year that media-to-telecom group Vivendi would be
the likely buyer but it would depend on price.
At 0954 GMT, Vivendi shares were trading flat at EUR19.96 while
Lagardere shares were trading down 2.4% at EUR31.88, as some
analysts highlighted the two groups may have difficulty agreeing on
a price.
"Pricing is an issue. We believe Vivendi is trying to obtain a
large discount to the recent transaction multiples that would value
the 20% stake at about EUR1.5 billion, which Lagardere might not
accept," Exane BNP Paribas analysts Charles Bedouelle said in a
note to investors.
The bank values the stake at EUR1.3 billion but noted that
recent feedback from Vivendi suggested a price well below the EUR1
billion.
"An initial public offering seems an unlikely outcome,"
Citigroup said in a research note, noting that if Vivendi and
Lagardere agree on a price, the transaction would be positive for
both groups.
"For Vivendi, investing capital in Canal Plus, a business that
it knows very well and assuming a sensible price, seems a strong
strategic move to us," Citigroup said.
In recent months, Vivendi has bought up the other minority
stakes in Canal Plus France from French broadcasters Television
Francaise 1 SA (TFI.FR) and M6-Metropole Television SA
(MMT.FR).
-By Ruth Bender and Patricia Kowsmann, Dow Jones Newswires; +33
1 40 17 17 54; ruth.bender@dowjones.com
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