VIVENDI MAY BE CLOSE TO APPEASING FRENCH REGULATORS
To The "49 Percent" Question
"It could come very quickly," said one source of the deal. "It might even come today." Another source characterized the deal as being on its "last lap."
Because of French laws governing the ownership of national TV stations, the CSA had questioned the $100 billion merger to create Vivendi Universal. French law bans any single shareholder from owning more than 49 percent of a national TV station. VU would own 100 percent of Canal Plus, which is currently a 49 percent-held subsidiary of Vivendi. Even though that would put Canal Plus at the legal limit, Canal's French subscribers would be grouped entirely under VU, which goes against the spirit of the law, according to the CSA and the French government.
Vivendi Chairman Jean-Marie Messier has been in meetings with the CSA in an effort to rework the proposal so as to appease the government. Although sources close to the talks said the tempo of the talks had quickened, details were still being hammered out.
"The company and the CSA are currently in discussions," said Olivier Zegna Rata, director of CSA Chairman Herve Bourges private office. "They are examining the issues point by point."
The Financial Times reported that Messier's new plan involved giving Canal Plus Programmes control of Canal's four million French subscribers. Tuesday's Le Figaro newspaper said Canal's French subscriber revenue would go directly to Canal Plus Programmes.
Whichever the case, the meeting could last late today or perhaps even until tomorrow.
And regardless of the CSA's decision, whether for or against Vivendi, the possibility of an appeal by Vivendi or Canal Plus' minority shareholders to the Conseil d'Etat, France's highest administrative court, was still a possibility.
Said one source, "The CSA cannot make a decision that will not be brought into question. The regulator therefore finds itself in a difficult position."
