Vivendi to take full control of Canal+ channels unit

Vivendi is to make an offer to acquire the shares in Société d’Édition de Canal Plus (SECP) – the Canal+ Group unit that controls the Canal+ premium channel family in France – that it does not already own. Vivendi, which currently indirectly owns 48.5% of SECP through its 100% control of Canal+ Group, said that it had received a request from “a large number of SECP’s shareholders” to make the move. It is offering €7.60 per SECP share, a premium of 19.1% on the closing price ahead of the announcement. 

Vivendi said it would file its tender offer statement with the French securities regulator as soon as media regulator the CSA was officially informed of the transaction. The deal means that Vivendi will use about €500 million of its cash pile to secure control of Canal+’s domestic premium service, comprising Canal+, Canal+ Cinéma, Canal+ Décalé, Canal+ Sport, Canal+ Family and Canal+ Séries. SECP also controls Canal+’s terrestrial broadcasting licence, and Vivendi’s ability to take control of the unit was dependent on a 2009 change in the law to permit a single operator to control a terrestrial broadcast channel.

SECP’s other shareholders, including banks are reportedly keen to sell their holding in the operation to improve their liquidity. However, the acquisition will enable Vivendi to simplify its relations with a key entity and give it greater control.

Separately, Canal+ Group has posted a 4% year-on-year increase in revenues for the first quarter to €1.37 billion, driven by growth in Africa and Vietnam, and by continued growth of SVoD service Canalplay in France. Canal+ Group had a total of 15.2 million subscriptions, an increase of 605,000 year-on-year.

Revenues from pay TV operations in mainland France were nearly stable year-on-year, in a difficult economic environment. However, international pay TV revenues were up 13.9% compared to the first quarter of 2014. Canal+ Group’s EBITA was €165 million, compared to €175 million for the first quarter of 2014, thanks to the impact of its increased investment in sport, notably French rugby and its exclusive deal with Eurosport on Canalsat.

Vivendi itself posted revenues of €2.492 billion, up 7.5% or 2.5% on a constant currency basis. EBITA was up  17.9%, or 14.1% at constant currency to €218 million.