PARIS Feb 13 French media group Lagardere
is suing media and telecoms group Vivendi for
1.6 billion euros ($2.2 billion) in a dispute over their Canal+
France pay-TV venture.
Lagardere wants Vivendi to return the sum to Canal+ France
because it claims Vivendi is making permanent use of the
business's entire cash surplus under a disputed cash management
agreement between the venture and its Vivendi-owned parent.
"Lagardere considers that the use made by the Vivendi group
of this cash management agreement has caused significant harm to
Canal+ France," Lagardere said in a statement, adding that the
cash pile was providing Vivendi with low-cost funding for its
Vivendi hit back, accusing Lagardere of trying to
destabilise it and force it to buy back Lagardere's 20 percent
stake in Canal+ France. Vivendi owns the remaining 80 percent as
well as all of parent company Canal+ Group.
"The group has asked its lawyers to file complaints of abuse
of legal process and will also seek damages, which it is
currently evaluating," Vivendi said in a statement.
The legal challenge by Lagardere comes after the two
companies failed to reach agreement on the ownership of Canal+
France in recent years.
Lagardere has been promising investors for several years
that it would seek to sell its non-media assets, including the
Canal+ France stake, with divestments seen as key to the
investment case for a company.
Vivendi and Lagardere have held talks about Vivendi buying
Lagardere's stake, but were unable to agree on a valuation.
Lagardere also attempted to list the stake in 2011, but
abandoned the move because of market volatility following the
Fukushima nuclear disaster in Japan.
Lagardere said in November it would try again to list the
stake in the first half of this year, but the company said on
Wednesday that the dispute with Vivendi put a question mark over
"Lagardere regrets that this situation, which was created by
the Vivendi group, has caused a deadlock preventing Canal+
France ... from going ahead with an IPO in normal conditions,"
The company said it has summoned Vivendi and Canal+ Group to
appear in the Paris commercial court on March 21. Vivendi said
it "vigorously contests" Lagardere's claims.
($1 = 0.7427 euros)
(Reporting by James Regan; Editing by David Holmes)