Pathé, France’s most successful independent distribution outfit, is in discussions to acquire a stake in Luc Besson’s financially ailing EuropaCorp, which confirmed the negotiations Wednesday. The two companies have already been collaborating on domestic distribution of EuropaCorp movies in France.
“The group Pathé has expressed interest in a potential stake acquisition in the capital of the company,” EuropaCorp said in a statement. “This expression of interest, non-binding, is subject to the realization of several conditions precedent, in particular an agreement on the restructuring of the existing debts of the group.”
French financial publication Les Echos, which was the first to report the talks, said that Pathé was interested in a majority stake in EuropaCorp, but neither company would confirm that to be the case.
EuropaCorp, whose library includes successful franchises such as “Taken,” “Taxi” and “Transporter,” has a debt load of about €230 million ($270 million) and has been looking for a white knight for some time. It previously had unfruitful discussions with several companies such as Netflix, according to several sources, and on Wednesday it warned that a deal with Pathé was by no means guaranteed.
“To date, as several essential conditions are not met – in particular the consent from the senior and junior lenders – the company cannot assure that this proposal will come to a successful conclusion, nor give any precision on the schedule or structuring of the potential transaction resulting from the current discussions,” EuropaCorp said.
Earlier this month, the company was granted a six-month debt waiver from a French commercial court to give it more time to stabilize its finances. “The board and the management of EuropaCorp considered that the safeguard proceeding would enable the negotiation of terms of a financial stabilization of the company via the restructuring of its debt and equity, while continuing its activity in peace,” EuropaCorp said.
Last December, the company signed a distribution deal with Pathé for the latter to handle the French release of three EuropaCorp movies per year over the next three years, notably “Little White Lies 2” and Besson’s “Anna.” However, EuropaCorp currently has no films in production. Last year, Pathé distributed France’s top two local movies, “The Magic Tuche” and “La ch’tite famille.”
In further steps to cut its overhead and reduce its debt, EuropaCorp sold the Roissy Films library, which includes more than 500 titles and 80 award-winning films, to Gaumont. The company also sold its French TV production unit for €11 million, and it announced that it would be laying off 22 employees in its Paris office within the next two years.