July 12 (Bloomberg) -- Lagardere SCA is targeting the fourth quarter for an initial sale of its shares in pay-TV operator Canal Plus France and has hired banks to manage the transaction, said two people with direct knowledge of the plan.
JPMorgan Chase & Co. and BNP Paribas SA have been selected to work with Lagardere on the initial public offering, said the people, who declined to be named because talks are private. Lagardere said July 2 it would begin preparing for an IPO of the 20 percent stake after talks failed to sell it to Vivendi SA, which owns the rest of the largest French pay-TV company.
Lagardere may be considering a Canal Plus IPO to bring Vivendi back to the negotiations, analysts said. Vivendi balked at an asking price of about 1.35 billion euros ($1.7 billion), two people familiar with the matter said July 2.
“I think it is a negotiating tactic, but they haven’t agreed on price and these things can drag on,” Alexander Wisch, an analyst at Standard & Poor’s Equity Research, said of the IPO. “One way to get a price is to let the market decide.”
Antoine Lefort, a Vivendi spokesman in Paris, declined to comment. Lagardere’s spokespeople didn’t return a call seeking comment.
Lagardere shares fell 0.7 percent to 25.84 euros in Paris trading, while Vivendi rose 0.8 percent to 17.48 euros.
Vivendi is looking to gain full control of Canal Plus as part of a strategy to consolidate shareholdings in its French units. On Feb. 1, it bought M6-Metropole Television’s 5.1 percent stake in the pay-TV operator for 384.2 million euros.
Analysts’ estimates of the value of the 20 percent Canal Plus France stake range from Citigroup’s 850 million euros to Credit Suisse’s 1.4 billion euros.
The IPO decision is in line with terms of a shareholder accord signed in January 2007, Lagardere said in a July 2 statement. According to the pact, Vivendi has the right to pre-empt a sale of the stake by Lagardere, which can then either begin an IPO or defer the process for another year. The owner of Elle magazine and Paris Match has until 2014 to sell.
Vivendi and Lagardere, both based in Paris, are trying to simplify their corporate structures. In addition to Canal Plus, Vivendi is considering buying the 44 percent stake in its SFR mobile phone unit held by Vodafone Group Plc, while Lagardere may sell its 7.5 percent stake in European Aeronautic, Defence & Space Co.
In May Lagardere announced a push into sports marketing that would see it compete directly with IMG Worldwide Inc., the sports group controlled by New York private equity firm Forstmann Little & Co. The French company wants to become a “world leader in the sports market,” Chief Executive Officer Arnaud Lagardere said.