Vivendi to pocket EUR 1.5bn from Veolia stake sale

9th December 2004, Comments 0 comments

PARIS, Dec 9 (AFP) - The French media and telecommunications group Vivendi Universal said Thursday it would earn EUR 1.5 billion (USD 1.9 billion) from the sale of a 15 percent stake in the utilities and water company Veolia Environnement.

PARIS, Dec 9 (AFP) - The French media and telecommunications group Vivendi Universal said Thursday it would earn EUR 1.5 billion (USD 1.9 billion) from the sale of a 15 percent stake in the utilities and water company Veolia Environnement.

The sale will reduce Vivendi's stake in Veolia, a former division of the Vivendi group, to 5.3 percent from 20.3 percent.

The proceeds will be used to reduce debt and marks a step toward the group's recentering on media and telecommunications, Vivendi said.

A 10 percent stake was sold directly on the market at EUR 24.65 per share, in a deal that received "a very favourable reception" from investors and netted EUR 996.8 million, the company said in a statement.

The offer price was 2.8 percent above Wednesday's share closing price for Veolia of EUR 23.97.

The sale was made ahead of the expiration on December 29 of a lock-up period on Vivendi's holding.

Vivendi borrowed shares from other Veolia institutional investors to proceed with Thursday's placement, and will return them at the end of this month.

A further two percent stake will be sold to Veolia Environnement on December 29 at Wednesday's closing price of EUR 23.97, generating EUR 194.8 million.

Vivendi also agreed to a transaction with Societe Generale that included the sale of three percent of Vivendi's holding in Veolia to the bank for a total EUR 305.5 million.

Vivendi will not book a capital gain on the total transaction, since the proceeds will offset current capital losses.

At the end of 2004, the company's net debt will be approximately EUR 4 billion.

On completion of these transactions, Vivendi will own a 5.3 percent holding in Veolia, which it has pledged will not be sold for 180 days.

Vivendi long had signalled it would sell the shares under a restructuring program that includes asset disposals to reduce its debt pile after a major acquisitions spree.

Investors cheered the deal Thursday. Shares in Veolia jumped 3.46 percent to EUR 24.80, while Vivendi was up 1.51 percent at EUR 22.91 in midday Paris trading, bucking a weaker market. The CAC 40 index was off 0.26 percent overall.

© AFP

Subject: French News

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