Lagardere Goes to Court Against Vivendi Over Cash Management

By Nadya Masidlover

PARIS--French media group Lagardere (MMB.FR) said Wednesday it's taking legal action against Vivendi SA (VIV.FR) over the management of cash generated by Canal+ France, a subscriber TV channel which is jointly owned by the two French companies.

Lagardere, which holds a 20% stake in Canal + France, is demanding restitution from Vivendi-- which owns the remaining 80% of the TV company-- of 1.6 billion euros ($2.15 billion) in cash and said that Vivendi has been called on to appear in the Paris commercial court on March 21, 2013.

In a statement, Lagardere said it contests the legality of the cash management agreement concluded between Canal+ France and its parent company Canal+ Group, a unit of Vivendi.

Vivendi said Tuesday it "formally denies the allegations" saying that Lagardere "expressly approved this agreement during the creation of Canal+ France in 2007" and not previously challenged it until now.

The move comes as analysts await the sale of several assets by Lagardere including the 20% stake in Canal+ France.

Tuesday, Lagardere said that the situation regarding the cash management "has caused a deadlock preventing Canal+ France, as things stand, from going ahead with an IPO in normal conditions".

Meanwhile, Vivendi affirms that the legal action is aimed to force it into acquiring the minority stake in Canal+ France.

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