CANAL+, Richemont and MIH have today agreed in principle to merge NetHold and CANAL+. This merger is a major strategic move, resulting in the creation of one of the largest television groups in the world, particularly in the field of pay-TV, with over 8.5 million subscribers. The group will have a significant position in France, Italy, Spain, Scandinavia, Benelux and Germany as well as an established presence in several growing markets in Central Europe.
The two groups have to date played a pioneering role in building new pay channels, enlarging the offer of television programming and increasing choice for the viewer. By combining their respective strengths and expertise, they will create a new entity able to meet the challenge of digital television, to convey the benefits of multichannel television to the viewers throughout Europe and to compete successfully on a world wide basis.
The two companies believe that the increased competition in the television industry offers unique opportunities for the new group to exploit fully its excellence in programming and production as well as to develop new brands, digital technology and subscriber management systems. The group’s aim is to offer a wide range of tailor-made channels adapted to local tastes across Europe.
The transaction has the full support of the company’s main shareholders - Havas, Compagnie Générale des Eaux, Société Générale, and Caisse des Dép?ts for CANAL+ and Richemont and MIH for NetHold - and remains subject to regulatory and shareholders’ approval.
At a joint conference in Paris, Johann Rupert, CEO of Richemont and Chairman of NetHold said:
"Over the past 4 years NetHold expanded rapidly across Europe. Our initial investment in FilmNet and Telepiù was augmented by significant organic growth. I welcome this merger as an opportunity to increase our involvement in the industry. I look forward to participate with my fellow shareholders in building one of the top media groups in the world." is, Johann Rupert, CEO of Richemont and Chairman of NetHold said:
Pierre Lescure, Chairman and CEO of CANAL+ said:
The growth potential of our new group is phenomenal. The combination of relatively immature pay-TV markets where NetHold is present and the introduction of digital tv offers superb opportunities both to increase our subscriber base and to distribute our programming software across a wider territory. I cannot think of a better strategic fit for CANAL+" and look forward to the challenge of leading our new Group into the era of digital television."
Prior to the completion of the merger, NetHold will transfer its operations in Africa, the Middle East, and the Eastern Mediterranean (Greece and Cyprus) to MIH, the South African group which currently owns 50% of NetHold. These operations will continue to cooperate with the new merged entity in the fields of technology and rights acquisition.
CANAL+ will acquire 100% of NetHold’s capital from Richemont and MIH in exchange for 6.1 million new CANAL+ shares and a cash payment of US$ 45 million. As a result of the share issue Richemont and MIH will own 15% and 5% of CANAL+ respectively.
Havas, Compagnie Générale des Eaux and Richemont/MIH will each have three seats on CANAL+’s Board of Directors.
As NetHold’s operations are currently in a significant growth phase, particularly in view of the roll-out of digital broadcasting, NetHold is expected to incur operating losses until 1998 and reach break-even in operating terms during 1999. Significant profits and cash generation are expected from the year 2000 onwards. CANAL+’s strong cash flow will support the attractive investment opportunities of the combined entity, while allowing its dividend per share to remain unaffected.
Compagnie Financière Richemont AG has interests primarily in the luxury goods and tobacco businesses. Brand names include Cartier, Montblanc, Rothmans, Dunhill and Peter Stuyvesant.
MIH is a listed holding company and was one of the pioneers of pay television services outside the USA, enjoying rapid growth.
A presentation to equity research analysts concerning the transaction will take place on Monday 9th September 1996 at 8.00 a.m. at the offices of CANAL+, 85/89, Quai Andre Citro?n, Paris 75711.
Richemont Jem Miller : 44-171-353 9203 (office)
Lowe Bell Financial : 44-181-995 6196 (home)