Vivendi in talks with beIN Sports, bids for Gameloft

PARIS (Reuters) - Media group Vivendi VIV.PA said on Thursday it plans to ally with Qatar-controlled beIN Sports channels in France to shore up its loss-making French Canal Plus pay-TV business.

A logo is seen over the main entrance of the entertainment-to-telecoms conglomerate Vivendi's headquarters in Paris April 8, 2015. REUTERS/Gonzalo Fuentes

It also said its board had approved a bid for Gameloft GLFT.PA as it aims to expand into the video games business.

With new players like beIN Sports, Netflix NFLX.O and Altice ATCA.AS offering sports, movies and series, Canal Plus' six French channels have been losing money and subscribers over the last four years.

About 316,000 subscribers terminated their contract last year, pushing operating losses to 264 million euros, from 74 million in 2014.

“The difficulties experienced by pay-TV Canal Plus threaten the entire group,” CEO Arnaud de Puyfontaine told analysts, referring to Canal Plus. He added Canal employs 8,200 people and is a key player and financier of the French film industry.

Vivendi didn’t disclose terms of the talks with beIN Sports and any agreement, which would last for five years, would have to be reviewed by French competition authorities.

The group, which replaced most of Canal Plus’ top managers last summer, plans to cut costs and improve contents at Canal’s French channels and aims for breakeven by 2018.

Vivendi also said it had launched a bid on Gameloft at 6 euros per share, 23 percent over the average price over the last six months.

“This offer is not solicited but remains amicable,” de Puyfontaine said.

Vivendi told markets watchdog AMF it owned more than 30 percent of Gameloft, valuing the rest of the shares it wants to buy at 367 million euros. Gameloft has a 468 million market cap.

Vivendi will have to convince investors, as Gameloft’s founders raised their stake in it this week to fend off a “creeping takeover”.

The Guillemot family’s stake rose to 18.99 percent of capital and 27.26 percent of the voting rights, AMF said.

Vivendi’s 2015 revenue rose 6.7 percent to 10.76 billion euros ($12 billion), core earnings fell 5.7 percent at 942 million. Gameloft shares closed 1.5 percent higher on Thursday.

($1 = 0.90175 euro)

Reporting by Mathieu Rosemain and Gwenaelle Barzic; Editing by James Regan and Geert De Clercq