Vivendi plans to buy rest of Neuf Cegetel
EmptyPARIS -- French media giant Vivendi announced plans Wednesday to launch a buyout offer for the remaining shares of telecommunications company Neuf Cegetel.
Vivendi, which owns 40.5% of Neuf Cegetel through SFR, confirmed rumors of talks between its subsidiary SFR and the Louis Dreyfus group, which owns a 29.5% of the company's stock, to acquire the remaining part of Neuf.
Under the agreement, SFR will purchase the Louis Dreyfus group's stake at a share price of 34.50 euros ($49.50), with a public offering for Neuf Cegetel at a share price of 36.50 euros ($52.36).
Vivendi owns 56% of SFR, and British mobile group Vodafone owns the other 44%. Vivendi hopes the move will reinforce its position in the rapidly growing broadband market by allowing the group to invest both in fiber optics and a fixed line/mobile convergence strategy for both businesses and individuals.
The move also would give Vivendi new options to sell music from its Universal subsidiary and movies from its pay TV auxiliary platform Canal Plus.
"This investment is a very attractive opportunity for Vivendi to strengthen its position and development in one of its main business sectors. The planned agreement would make it possible to merge two companies with increasingly complementary and healthy businesses and would create value for Vivendi shareholders," said Jean-Bernard Levy, chairman of Vivendi's management board.
While no date has been set for the high-profile deal, "Vivendi plans to raise funds of 1 billion euros-2 billion euros ($1.4 billion-$2.9 billion) from its shareholders at the appropriate time," the group said.