Lagardere to sell 20% stake in Canal Plus

UBS values 20% share at $1.35 billion

NEW YORK -- Media and telecom company Vivendi said Thursday that Lagardere plans to divest its 20% stake in pay TV firm Canal Plus France

Based on a 2007 agreement, each year through 2015, French media firm Lagardere has a month-long window, which ends April 15, to trigger the sale of its stake. The sale can happen either directly to Vivendi or via an IPO, but the latter is seen only as a last resort.

Negotiations about a price between Vivendi and Lagardere could run until mid-summer.

"The market always expected this to happen at some point so this should not come as a surprise," said UBS analyst Polo Tang, who values the 20% stake at €1 billion ($1.35 billion). "We see an IPO as the least preferred option for Lagardere given it would be a 20% stake in a company that does not distribute dividends."

For Vivendi, while buying in the 20% stake in the pay TV operator "could raise questions over Vivendi's balance sheet," according to Tang, "purchasing French minorities (a previously stated objective) would be taken better by the market than more expensive acquisitions in emerging markets."
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