Vivendi will give up rights to the shares of Polska Telefonia Cyfrowa Sp. z o.o. under an accord signed today with Deutsche Telekom and the creditors and primary shareholder of Poland’s Elektrim SA, the Paris-based company said in a statement. Deutsche Telekom will be recognized as the sole owner of PTC, Poland’s third-largest mobile-phone operator.
Vivendi, whose units include the world’s largest video-game and music companies, aims to take full control of its domestic assets under Chief Executive Officer Jean-Bernard Levy. The company is seeking to buy out the 44 percent stake held by Vodafone Group Plc in SFR, the Vivendi unit that is France’s second-largest telecommunications company.
Today’s resolution “is genuinely an unexpected surprise” that will give Vivendi more cash to pursue acquisitions, said Conor O’Shea, an analyst at Kepler Capital Markets in Paris. “These legal disputes that date back to the Messier era have almost always been negative.”
The agreement ties up a loose end from the tenure of former Vivendi CEO Jean-Marie Messier, whose $77 billion acquisition spree left the company with legal difficulties in countries including the U.S. and France.
“We have untangled the knot,” Deutsche Telekom Chief Financial Officer Timotheus Hoettges said in a separate statement. “The absolute legal certainty that is now recognized by all parties is a clear message regarding PTC’s strategic development and paves the way for the future.”
Vivendi rose 0.4 percent to 20.58 euros at 11:35 a.m. in Paris trading. Deutsche Telekom dropped 1.1 percent to 9.77 euros in Frankfurt.
The roots of the Polish dispute go back to 1999, when Vivendi spent 2 billion euros to buy a stake in PTC through a joint venture with Elektrim. Deutsche Telekom claimed the deal violated a shareholders accord it had with Elektrim, a Polish power and telecommunications group that will exit bankruptcy as a result of today’s deal.
PTC has been the subject of more than 50 lawsuits and arbitrations around the world, including arbitration proceedings in Vienna and a case in the U.S. Vivendi reduced the book value of its PTC shares to zero in 2006.
“Several legal steps” in Poland must still be completed for the PTC agreement, probably in the first quarter of next year, according to today’s statement.
To contact the editor responsible for this story: Vidya Root in Paris at firstname.lastname@example.org