PARIS Vivendi (VIV.PA) has reached a deal to buy out partner Lagardere's (LAGA.PA) 20 percent stake in pay-television operator Canal+ France for an undisclosed amount, according to French magazine le Nouvel Observateur.
A spokesman for Vivendi declined to comment on Friday, and Lagardere was not immediately available.
The two companies have been locked in a legal battle since February when Lagardere sued Vivendi for 1.6 billion euros ($2.21 billion) in damages over Canal+. It argued that Vivendi makes 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 as the two sides attempted to reach an accord, a person familiar with the situation said.
Lagardere has been trying to unload its stake for several years as part of its effort to shed non-core assets, but was never able to agree on a price with Vivendi. It also explored an initial public offering in 2011.
Le Nouvel Observateur said the deal and price would be announced next week, without citing sources.
Lagardere values its stake in Canal+ France at 1.15 billion euros in its accounts, while Vivendi believed it was worth around 800-900 million euros, said the person familiar with the situation.
Vivendi shares closed down 1 percent to 18.77 euros, while Lagardere's closed up 1.2 percent 26.67 euros. ($1 = 0.7250 euros)
(Reporting by Leila Abboud; Editing by Elaine Hardcastle)