PARIS — Vivendi struck back Wednesday against the suggestion that it might be held for ransom by Canal Plus’ minority shareholders not satisfied with the Vivendi-Seagram deal.
Earlier this week, the Assn. des Actionnaires Minoritaires, (Adam), lead by Colette Neuville, claimed French regulations governing mergers meant the new group would have to offer cash for the shares of any minority shareholder who wanted to relinquish them.
Neuville’s comments were widely reported in the press.
Returning fire Wednesday, Vivendi issued a statement saying the company was “astonished by the position Neuville has taken in the name of the Adam.”
The statement went on to say that laws relating to broadcasting companies prevented Vivendi from offering to buy the 51% of shares it doesn’t own in Canal Plus.
Moreover, it pointed out that the court of appeal had ruled in Vivendi’s favor in 1998, when the Adam had challenged the company on similar grounds for acquiring South African company Richemont’s 15% stake in Canal Plus.
But the flack against Vivendi may not stop there.
The company refused to comment Wednesday on French press reports that the new Vivendi Universal could receive a 5 billion franc ($634 million) tax break from the French government.
The daily newspaper Le Figaro was the first to claim Finance Minister Laurent Fabius intended to waive taxation on the capital gains created by the three-way merger between Vivendi, Canal Plus and Seagram.
Such a gesture, Le Figaro speculated, would reflect political approval for a deal that creates a media giant second in the world only to AOL-Time Warner.
A spokesman for Canal Plus strenuously denied Vivendi Universal might benefit from government largesse, saying if the group were not required to pay the tax, it would be “for reasons strictly to do with fiscal law, not as a gift to the company.”
“The question was raised, and now it is up to the Ministry to examine the appropriate articles of the law,” the spokesman said.
A Finance Ministry spokesman said a decision had “yet to be taken.”
Keeping up pressure
But France’s satirical magazine Le Canard Enchaine refused to let the matter drop Wednesday, claiming the “leak” in Le Figaro had caused considerable embarrassment to the ministry, which now found itself in a no-win situation between honoring its assurances to Vivendi and becoming embroiled in a scandal.
The daily Les Echos cited articles of fiscal law that showed there was “nothing to stop” the finance minister from saving Vivendi Universal from the tax man.
The paper said that while such a break could not be conditional upon Vivendi Universal complying with political constraints, it would doubtless “maintain political pressure on Vivendi so that its transformation into a world company would not be to the detriment of France’s cultural position.”