Canal Plus close to deal with Stream

December 20, 2001 Posted: 1442 GMT

LONDON (CNN) -- Vivendi Universal's pay television arm Canal Plus hopes to finalise soon a deal to buy Rupert Murdoch's Italian venture Stream.

Canal Plus Chief Executive Pierre Lescure said a deal would be sorted out "in the next few days."

French media giant Vivendi plans to merge loss-making Stream into its own Italian venture Telepiu, creating a single pay television service in Italy and therefore ending a fierce and expensive battle between the two operators for subscribers.

Lescure told a news conference in Paris that a combined Stream/Telepiu would still suffer heavy losses next year but would break even in 2004.

Stream made a loss of 400 million ($360 million) last year while Telepiu lost 220 million euros. Telepiu has about 1.8 million subscribers.

Vivendi Chief Executive Jean-Marie Messier told The Financial Times on Thursday: "There is an agreement at our level... which means I will definitely be able to go away on holiday on Friday."

In the past week Messier has announced the $10.3 billion acquisition of USA Networks' entertainment assets and the purchase of a 10 percent stake in EchoStar Communications Corp.

In announcing the USA Networks deal, Messier said he was "very close" to a deal to buy Stream whereby Vivendi would pay less than $600 per Stream subscriber.

Vivendi announced earlier this month it was in talks with Murdoch's News Corp about buying Stream after regulators appeared ready to block an original deal to merge their Italian pay-TV operations.

Sources close to the companies told Reuters that  regulators had made it clear they were not comfortable with two of the world's biggest media companies and their top-ranking movie studios joining forces in Italy's pay-TV market.

By pulling out, Murdoch would resolve that problem.