Vivendi, Lagardere in $2.2 Billion Legal Dispute Over 2007 Canal+ Deal
The two French media companies are contesting claims over the cash management of their French pay TV joint venture.
French media and telecom company Vivendi is defending itself against a lawsuit filed late Tuesday in a Paris court over a 2007 TV deal with media group Lagardere TV Holding.
Lagardere is suing Vivendi for $2.2 billion (€1.6 billion) in a dispute over the management of their Canal+ France joint venture.
In the suit, Lagardere claims that the cash management agreement between Canal+ France and its parent company Canal+ Group, a subsidiary of Vivendi, is null and void because it was not approved by government regulators.
Lagardere is seeking to have Vivendi return the original cash investment plus restitution because it says Vivendi has used the cash to further its own overall business goals instead of those expressly in the interest of Canal+ France and its shareholders.
The legal maneuver comes after years of negotiations between the two companies. Lagardere has been trying to sell its 20 percent stake to Vivendi, but they have so far been unable to agree on a valuation, and Lagardere failed in an attempt to force an IPO in 2011.
Vivendi said it plans to counter-sue for abuse of the legal process and seek damages resulting from the negative impact on its image.
“Vivendi is even more surprised by this claim since Lagardere TV Holding expressly approved this agreement during the creation of Canal+ France in 2007,” the company said in a statement on Wednesday. “The group considers this an attempt by the Lagardere Group to destabilize Vivendi and force it to buy back the former’s stake in Canal+ France.”
Lagardere said that it considers that Vivendi's cash management "has caused significant harm to Canal+ France. The lawsuit will see a first hearing on March 21 in the Paris Commercial Court.