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Vivendi sets $2.6B TV deals
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July 22, 1999: 10:59 a.m. ET
French giant sparks speculation of more consolidation in Europe's pay-TV sector
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LONDON (CNNfn) - French conglomerate Vivendi sent a tremor through the European media sector Thursday, when it moved to reinforce its grip on pay-TV operators Canal+ and BSkyB in deals worth a total of $2.6 billion.
Vivendi is purchasing an additional 15 percent stake in Canal+, Europe's largest pay-TV group, held by Switzerland's Richemont. That will take the French group's ownership to 49 percent, although it said future share issues will reduce its stake to the 40 percent level.
Vivendi also is raising its stake in Britain's BSkyB, 40 percent-controlled by Rupert Murdoch's News Corp. (NWS), to 24.5 percent from 17 percent. Vivendi is buying minority stakes from U.K. groups Granada and Pearson, paying 600 pence per share for their holdings, for a total outlay of around 775 million pounds ($1.22 billion).
That was enough to get investors speculating on a possible merger with BSkyB, sending stock prices surging. BSkyB (BSY) has been a consistent candidate for a deal with Canal+ (PAN) since cooperation talks broke down in February over management control issues. BSkyB stock jumped 5 percent to 578 pence in London, and U.K.-listed rivals Granada (GAA) and Carlton Communications (CCM) were not far behind.
Richemont swapped the Canal+ holding for a 2.9 percent stake in Vivendi (PEX). That deal is valued at 1.3 billion euros ($1.4 billion).
Richemont acquired the stake when it merged its European pay-TV service with Canal+ in 1997. Richemont chairman Johann Rupert said in a statement, "Whilst Richemont has had an excellent return on its investment in Canal+, this transaction will permit us in due course to re-deploy the proceeds in the further development of our core luxury goods business."
Richemont is controlled by South Africa's Rupert family, and owns a collection of luxury brands including Cartier jewelry, Montblanc pens, Piaget watches and a 23 percent interest in cigarette giant British American Tobacco (BATS).
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Vivendi
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