Canal+ cables up

Feevee giant takes lion's share of CGV

By VARIETY STAFF

PARIS --- French pay television company Canal Plus is about to become one of the country's main cable operators by taking a majority stake in Compagnie Generale de Videocommunication (CGV).

Canal Plus announced Tuesday that it has agreed to a deal with CGV owners Compagnie Generale des Eaux (CGE) to raise its current 20% share in CGV to 76.6%, leaving CGE with 15% and the Societe Generale bank with 8.4%. The deal is subject to the agreement of the Canal Plus and CGE boards.

The French pay TV company has confirmed that it still is negotiating "to bring an international industrial partner" into CGV, that partner will be Time Warner, which in the past has been said to be looking for around 35% of CGV.

Earlier this year, CGE chairman Jean-Marie Messier folded the majority of his audiovisual assets into Havas --- in which CGE is the main shareholder --- but kept the loss-making cable operations outside the agreement.

Rumors of a deal with Canal Plus have been circulating for several months, although the waters were muddied in June when France Telecom made a left-field bid for the cable operation, which has about 550,000 subs for 1.9 million homes passed.

Since it was launched in 1984, CGV has leaked red ink at a prodigious rate, with 1996 losses estimated at around $51 million on revenues of $144 million. The company's debt is reported to be around $241 million.

The question of who assumes responsibility for the debt appears to have been one of the key issues between Canal Plus and CGE. Canal Plus sources told Daily Variety the paybox acquired the CGE shares free of debt and that the deal cost Canal Plus around $83 million.

For the pay TV company, getting hold of CGV provides a further guaranteed outlet for its digital platform, via cable. The CGV cable operation was the first to go digital in France and currently has 25,000 digital subscribers. France's two other main cable operators, France Telecom and Lyonnaise des Eaux, both are backers of rival Television Par Satellite digital platform. Canal Plus chairman Pierre Lescure was known to be uncomfortable with the idea that all the main cable nets could be in the hands of TPS shareholders.

Canal Plus exec commercial director Paul-Herve Vintrou was named CGV chairman.

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http://www.variety.com/article/VR1116674987.html

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