Shareholders Press Vivendi on Canal Plus Offer

Canal Plus minority shareholders may try to block the acquisition of Europe’s biggest pay-TV company by Vivendi if they aren’t offered better terms for their shares, the head of a French shareholder group said.

The Assn. for the Defense of Minority Shareholders will first ask a French financial market regulator to force Vivendi to make a higher bid for the 51% of Canal Plus it doesn’t already own, said Colette Neuville, president of the association. If unsuccessful, she will try to stop the merger by getting enough shareholders to vote against it.

Last week, Vivendi agreed to buy Canal Plus and Seagram Co. for about $34 billion in stock. Vivendi offered two of its shares for each Canal Plus share and stock in a separate Canal Plus company that will manage its French TV assets. Since the day before the accord was announced, Canal Plus shares have fallen about 9%.

“The market is not happy with this deal,” Neuville said. Canal Plus “shareholders are not obliged to accept the terms of the Vivendi offer.”

Canal Plus shares Monday closed up 1.6 euros, less than 1%, at 185 euros in Paris.

The acquisition could be blocked if more than a third of Canal Plus shareholders vote against it, Neuville said.

Neuville said that she has not yet contacted the French regulator and did not know how many Canal Plus shareholders were unhappy with the proposed acquisition. A cash payment added to the terms would be helpful but not absolutely critical, she noted, adding that she owns one share in Canal Plus.

This is not the first time that Neuville has battled Vivendi.

In 1998, her organization forced Vivendi, then called Cie. Generale des Eaux, to increase the payment to Havas minority shareholders when it bought the French media company.

The payment came in the form of a special dividend and represented an increase of about 10%, Neuville said.