PARIS — The post-Messier Vivendi Universal looks like it will have a decidedly French accent, starting with its troubled pay TV business Canal Plus.
Viv U confirmed plans Tuesday to create a leaner, meaner Canal Plus by selling off the loss-making foreign operations while keeping the juicy bits — the eponymous French paybox Canal Plus, satcaster CanalSatellite, a 21% stake in Spanish pay operator Sogecable, production arm Studio Canal and a bouquet of niche channels called Multithematiques — to itself.
The company’s remaining assets in Belgium, Poland, the Netherlands and Italy are all presumably on the disposal list along with set-top box technology provider Canal Plus Technologies.
“The new group will be more coherent and independent and will contribute financially to reducing Viv U’s debt,” a company statement said Tuesday.
The proposed restructure was presented on Tuesday by Canal Plus chief Xavier Couture to French media watchdog, the Conseil Superieur de l’Audiovisual, along with staff, the Canal Plus advisory board and union reps.
Viv U Entertainment chairman Barry Diller and Universal Studios chief Ron Meyer were also present in Paris for the announcement.
Pending approval, the new Canal Plus will be listed on the Paris stock exchange, with Viv U retaining 49% of the new company’s capital, the maximum allowable by French law.
At the heart
Canal’s premium channel will be the heart of the new group, which will hold on to all of Canal’s French activities. These include Canal+ Distribution (100%, which controls the subscriber lists) Canal+ Regie (100%, commercial sales arm) CanalSatellite (66%), and Multithematiques (62 %).
Also included will be i*television (100%, news channel) Pathe Sport (60%) and 100% of Media Overseas (held directly by Viv U).
These assets will be transferred to the new Canal in exchange for a capital increase by current Viv U and Canal Plus Group shareholders.
“The project aims to assure Canal’s future and development by giving the enterprise the means to finance its creative audiovisual development, while at the same time bringing new resources to Vivendi Universal,” the company said.
The international activities will be temporarily held by the Canal Plus Group, with a view to selling off all or part of them. The selloff of unprofitable Euro pay TV businesses continues a process former chief exec Jean Marie Messier had already started.
But the verdict is out on whether the monies raised will make a serious dent in its $17 billion debt pile.
Most of the cash will come from the flotation of the other 51% of the shares on the market and by the pending sale of Telepiu to Rupert Murdoch for x1.3 billion ($1.3 billion). Murdoch is thought the leading candidate to pick up other remaining pieces, but is not believed likely to pay a premium for them.
Canal insists the restructure will help the group regain profitability, since it will reunite the channel’s production and distribution activities, while giving it control over its subscriber list.