Vivendi rejects approach from Sebastian Holdings

17th May 2006, Comments 0 comments

PARIS, May 17, 2006 (AFP) - The French media and telecom group Vivendi rejected an approach from its biggest shareholder Sebastian Holdings on Wednesday, saying the move was an unrealistic attempt to break up the company.

PARIS, May 17, 2006 (AFP) - The French media and telecom group Vivendi rejected an approach from its biggest shareholder Sebastian Holdings on Wednesday, saying the move was an unrealistic attempt to break up the company.

Vivendi, which also reported a rise of 11 percent in first-quarter net profit, said that it considered the approach, in the form of "a request for cooperation", to be directed at "dismembering the group".

The price of shares in Vivendi was showing a gain of 3.09 percent to EUR 28.66 in afternoon trading.

A source close to Sebastian Holdings, an investment fund, told AFP that it had proposed buying all of the shares in Vivendi at EUR 33.50 per share, valuing the group at EUR 38.6 billion.

The source, who declined to be named, said that the offer followed "friendly talks" with Vivendi, and had been made at Vivendi's request.

However, the supervisory board of Vivendi said in a statement that it had rejected the approach unanimously, saying that it was based on economic and legal "hypotheses" which could not be put into effect.

A source close to Sebastian Holdings said that it, and an associate Amir Jahanchahi, held 4-5 percent of Vivendi, making them collectively the biggest shareholders in the French group.

Sebastian Holdings is headed by a Norwegian, Alexander Vik. In its approach to Vivendi, it has two partners, Jahanchahi and a Belgian, Benoit Jamar, a former senior manager at the bank Donaldson Lufkin and Jenrette.

Vivendi is the subject of recurrent talk that a move might emerge to dismantle the group which has interests in many areas ranging from mobile telephones, to television and music.

British mobile phone group Vodafone is frequently cited as being interested in acquiring the telecoms business of Vivendi, which comprises French group SFR and Maroc Telecom of Morocco.

A source said that the bid by Sebastian Holdings was supported by Bank of America and Deutsche Bank.

Foreign takeovers of French companies, of which Vivendi is one of the best known, are a sensitive political issue in France and the centre-right government of Dominique de Villepin has formulated a policy of "economic patriotism", asking French companies and investors to act in the interest of the country.

A rumoured takeover bid from Pepsico of the US for French dairy products group Danone in July last year sparked outrage in France and led to calls for greater protection of French companies.

In a statement on Wednesday, Vivendi insisted on the logic of its current strategy based on a combination of its telecoms businesses, its Canal Plus pay-TV operations, video games unit Vivendi Games, and music business Universal Music.

The group said it had made a net profit of EUR 592 million in the first quarter, growth of 11 percent compared with the equivalent figure from 2005.

Sales were EUR 4.766 billion from EUR 4.509 billion in the same period of 2005.

The group also provided forecasts for growth this year, saying that net profit would increase by 16 percent instead of a previous forecast of 11-13 percent.

The group also said that net profit would reach EUR 3.5-4.0 billion by 2011, representing cumulative growth of 46-67 percent over the next six years.

"All the group's business units should contribute to this growth, in particular video games and pay-TV in France," Vivendi said.
Copyright AFP

Subject: French news

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