Vivendi sells TV stake to Telenor

Messier: Needs to sell assets to pay off Vivendi's debt

PARIS, London -- Vivendi Universal, Europe's biggest media company, agreed to sell its stake in TV arm Canal Digital to Norway's Telenor for 2.15 billion crowns ($274 million, 290 million euros) to settle a year-long dispute.

Canal Plus, the pay-TV unit of Vivendi, said the Norwegian telecom company will pay 290 million euros once the deal is completed, instead of the 257 million euros it had demanded up front, with a differed payment of 66 million euros.

Canal Plus took Telenor to court because it refused to make a cash payment for the purchase of a 50 percent stake in Canal Digital, its Norwegian pay-TV unit, that had been agreed in July. Telenor had insisted it would not make the payment until the European Union cleared its deal.

The sale of Canal Digital comes a week after Rupert Murdoch's News Corp buried hostilities with Vivendi and agreed to buy its Italian pay-TV operator for 1 billion euros ($946 million).

Vivendi Chief Executive Jean-Marie Messier has been under pressure to slash the company's debt pile of 17 billion euros, reverse share losses and the company's losses.

In New York on Thursday, Messier was candid about the fact that investors, and even some of his own board members, have lost confidence in him. "I'm not the owner of my company. I'm a paid CEO,'' Reuters quoted him as saying, adding he acknowledged the board could get rid of him if it chose.

Messier also said the company's next big move may involve Cegetel, the French telecom company 44 percent owned by Vivendi. Cegetel has the strongest cash flow of any of Vivendi's businesses, but Vivendi currently can't use that cash flow to reduce debt since it owns less than 50 percent.

"That's a true problem. We're going to have to solve that problem,'' he said.

But Messier wouldn't specify whether the solution lies in buying a greater stake of Cegetel from minority owners BT Group, SBC Communications and Vodafone Group, or in some other arrangement.

Vivendi (PEX) shares fell 7.1 percent to 27.00 euros in early trading on Friday, while the CAC40 benchmark index in Paris slid 2.3 percent to a fresh eight-month low of 3,867.76 as investors fretted about Wall Street's latest stumble on profit warnings from the U.S. and falling retail sales figures. (more)