Canal Plus U-Turn Heightens Talk of Vivendi US Asset Sale

10 February 2003

In a decision with potential ramifications for its US operations, Vivendi Universal has performed an abrupt volte-face in its designs for French pay-TV unit Canal Plus Group, abandoning plans to float a majority stake on the stock market.

The revelation came as the media mammoth’s chief executive Jean-René Fourtou denied speculation that the loss-making Canal Plus was to become the latest Vivendi unit to be sold off outright in a bid to slash debt.

“Canal Plus is not for sale and retains its position within Vivendi Universal,” he declared. “The stock market flotation announced in July is no longer envisaged. The unavoidable debt reduction programme at Vivendi Universal will continue by the sale of other assets.”

These “other assets” are thought to include Vivendi’s US entertainment portfolio, which includes Universal Music Group and USA Networks. The group has been considering bids for the assets, and the cancellation of the Canal Plus IPO will increase the pressure to sell.

However, a quick disposal could land Vivendi with a $2 billion (€1.9bn; £1.2bn) tax liability. This can only be avoided if it keeps 40% of all the US assets or retains 100% of Universal Music for a further two years.

Back on the other side of the Atlantic, Fourtou confirmed reports last week that Canal Plus boss Xavier Couture is to be replaced by the Vivendi chief’s trusted lieutenant Bertrand Meheut [WAMN: 04-Feb-03].

Data sourced from: Financial Times; additional content by WARC staff