Canal may be minus for deal

Vivendi U may have to pay $2 bil - $4 bil to French feevee's shareholders

PARIS — After the negative reactions of doubting market analysts, the Vivendi/Seagram deal could face more trouble — from shareholders in Canal Plus, the pay TV group in which Vivendi owns a 49% stake.

Under the terms of the deal unveiled last week, most of the pay TV group’s activities will be absorbed in a three-way merger with Vivendi and Seagram.

In exchange for every share they currently own in the Canal Plus group, shareholders will receive two Vivendi Universal shares and one share in what remains of Canal Plus — that is to say, the French pay TV channel.

But shareholders do not have to accept those terms, the Assn. de Defense des Actionnaires Minoritaires (Adam), a private association of minority shareholders, maintained in the French press Monday.

Dubbing the pared down TV company “Canal Minus,” Adam president Collette Neuville asserted that under French merger regulations, the minority shareholders could force Vivendi Universal to buy back their shares –for cash.

Neuville told Daily Variety that if every minority shareholder cashed in his shares, the bill would total some $2 billion-$4 billion.

“I’m not suggesting that will happen, because there are of course other solutions,” she said. “What we want is for Canal Plus shareholders to be aware of all the options before them.”

Invoking rule

As a first step, Adam is planning to request that the Conseil des Marches Financiers, the French regulator concerned with takeovers, to apply an as-yet-unapplied article in its regs to force Vivendi to buy back the 51% of Canal Plus shares that it doesn’t already own.

The new regulation was introduced in February 1999 to protect the minority shareholders of companies that merge or that significantly change their activity. Neuville maintained that the Vivendi/Seagram deal was “a textbook case.”

In the meantime, the phones haven’t stopped ringing at the Adam as anxious Canal Plus shareholders — and speculators who are now contemplating buying shares in the group –call to find out more.

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