Lagardere, which has a 20% stake in Canal Plus France, is suing Vivendi, which owns the remaining 80%, for Euros 1.6 billion ($2.2 billion), which is the reserves that Canal Plus France has given over to Vivendi under a cash management agreement inked in 2007.
Lagardere aims to force Vivendi to hand back this cash to Canal Plus France as it claims the agreement is null and void since it wasn’t approved by the company’s supervisory board.
Reacting to the accusations, Vivendi today announced it will sue Lagardere for abuse of legal process and will also seek damages.
Vivendi argued the cash management pact was an “ordinary course agreement under normal conditions, and which does not require prior approval from the supervisory board of Canal Plus France.”
“(Vivendi) considers that this is an attempt by the Lagardere Group to destabilize Vivendi and force it to buy back Lagardere’s stake in Canal Plus France,” said the company in a statement.
According to Lagardere, Vivendi has been diminishing the value of Canal Plus France, and preventing it from being listed on the stock market by using the group’s cash surplus to finance its own business goals.
Lagardere has been eager to sell its stake in Canal Plus to Vivendi for some time, but negotiations have failed over the pay TV group’s valuation.
The court hearing will take place on March 21.