* Vivendi agrees to buy Lagardere's 20 pct stake in Canal+
* Deal ends long-running battle between the companies
PARIS Oct 28 Vivendi has reached an
agreement to buy out partner Lagardere's 20 percent
stake in pay-television operator Canal+ France for 1.02 billion
euros ($1.41 billion), the companies said on Monday.
The accord puts an end to a long-running battle between the
two French media groups, having finally met halfway on price
after legal mediation that began in May.
Lagardere valued its stake in Canal+ France at 1.15 billion
euros in its accounts, while Vivendi believed it was worth
800-900 million euros, a source familiar with the situation told
"This agreement, which will be submitted for information to
the appropriate works councils, puts an end to all disputes
between the two groups related to this participation," the
companies said in a joint statement.
Canal+ France is a unit of Canal+, Vivendi's international
pay-TV business, which is smaller than British peer BSkyB
and News Corp-owned pay-TV operators in Europe.
For Vivendi, the deal rids it of a minority shareholder in
Canal+ at a time when pay-TV is set to become a bigger priority.
Vivendi is in the midst of a restructuring to pay down debt,
shed telecoms assets in Morocco and elsewhere and focus on its
TV and music businesses.
Canal+ contributed roughly a quarter of Vivendi's sales of
10.84 billion euros in the first half of the year. Those figures
are restated to reflect Vivendi's sale of Maroc Telecom
and video games maker Activision Blizzard.
Vivendi and Lagardere have been in court since February,
when Lagardere sued Vivendi for 1.6 billion euros in damages
over Canal+. It argued that Vivendi made permanent use of the
business's entire cash surplus under a disputed cash management
agreement between the venture and its parent company.
They began arbitration in May, which was extended by several
weeks in early October to try to reach an accord.
UBS analyst Polo Tang, who valued Lagardere's Canal+ France
stake at 800 million euros, said before the accord was announced
that it would be good for Lagardere shareholders because it
could lead to further cash returns.
Tang added that Canal+ was a low-growth asset that had been
hurt by competition from subscription sports channel BeIn Sport,
which is backed by Gulf TV broadcaster Al Jazeera.
The acquisition would also reduce shareholder returns for
Vivendi from the previously expected 4 billion euros to 3
billion euros, UBS said.
Vivendi has not yet indicated how much of the proceeds of
the Maroc Telecom and Activision sales it will return to