Parretti Drops Bid for Vaunted French Studio

French film group Pathe Cinema, at the center of a bitter fight for control, landed safely in French hands Wednesday after Italian businessman Giancarlo Parretti dropped his two-year-old battle for the company.

Pathe Cinema director Jean-Rene Poillot said Parretti had agreed to sell his 46.5% stake in the film group to Chargeurs SA, a French holding company with interests in entertainment, textiles and transport.

Poillot said Chargeurs would pay $206 million for Parretti’s stake plus a separate 52.4% stake in Pathe Cinema it earlier said it was buying from France’s Groupe Rivaud.

Chargeurs also said it would buy--for a 16% premium--the remaining 1.1% of Pathe Cinema that is publicly held. The Paris stock exchange had suspended trading in the shares after the acquisition of the Rivaud stake was announced.

Pathe Cinema is not to be confused with Pathe Communications, the Beverly Hills company Parretti is using in his attempt to buy MGM/UA Communications Co. Market analysts said Parretti could be in need of funds as he pursues MGM/UA, but Parretti spokesman Craig Parsons said the French sale should have little impact on that.

“Whether the funds will be used toward MGM/UA or not, I can’t say,” Parsons said. “But whatever the dollar amount is, it doesn’t seem to be of major magnitude compared to the $1.3-billion (MGM/UA purchase price).”

Under the terms of the French deal, the Beverly Hills company will be allowed to continue using the Pathe Communications name, Parsons said.

The sale of Parretti’s stake in Pathe Cinema marks the end of a 25-month tussle of wills between Parretti and the French government, which was determined to keep an intrinsic part of France’s cultural heritage out of the Italian businessman’s hands.

Pathe Cinema, which produced such cinematic masterpieces as Luchino Visconti’s 1963 film, “The Leopard,” and Federico Fellini’s “La Dolce Vita” in 1959, has a library of 250 films and a network of 150 movie theaters.

Parretti was to take a stake in Pathe Cinema in 1988, when Rivaud agreed to sell 52.3% to Max Theret Investissement, in which Parretti holds about 30%. But the French government blocked the deal, and Rivaud took back the stake in November, 1988.

Last May Rivaud agreed to sell its stake in Pathe Cinema to Pathe France Holding. But Finance Minister Pierre Beregovoy said during a parliamentary debate on drug money laundering that he wanted more information on the origins of Parretti’s money before deciding on the deal. Finally, on June 15 he torpedoed the takeover, saying it might “threaten public order.”

The “public order” clause is one of the few grounds on which the government is allowed to block a bid from within the European Community.

Chargeurs is not new to the world of entertainment. It sold a stake in a French television channel in May but retains a 13% stake in British Satellite Broadcasting.

It also owns part of AMLF, a film distribution network, and 50% of film group Renn Productions. The brother of Chargeurs Chairman Jerome Seydoux, Nicolas Seydoux, is chairman of Gaumont, a leading French film company.

Chargeurs is flush with cash after selling a large stake in UTA, a domestic French airline, to Air France earlier this year.