Canal Plus and France Telecom have agreed tosell their French cable TV operations to UK private equity firm Cinven andaggressive cable group Altice.
The deal, which will be completed in the firsthalf of 2005, sees 60% of the cable company sold for a total of Euros528m. Itis subject to various EU and municipal approvals. Following the deal Cinvenwill own 50% of the new company, Altice 10% and Canal Plus and France Telecom20% each.
The businesses being sold pass some 4.2 millionhomes and have 1.7 million active customers in 17 of France's 20 largestcities.
The sale represents one of the final stages inthe consolidation of the long-troubled French cable sector. In March Canal Plusand France Telecom agreed to merge their two loss-making cable operations witha view to making the businesses more viable and more attractive to a buyer. Inthe same month, Liberty Media's subsidiary UnitedGlobalCom paid a minimum ofEuros508m for a 50.1% stake in local market leader Lyonnaise Cable.
Altice is a young company headed by French cablepioneer Patrick Drahi. It currently operates Strasbourg-based EstVideocommunication in France, Coditel Brabant, thecable operator of Brussels in Belgium and Coditel SA, the cable operator of thetown of Luxembourg.
Cinven, a venture capital firm born out of thecoal industry pension fund, previously bought the UK's Odeon Cinemas chainbefore selling it in 2003.
In a statement Canal Plus said it "aims toencourage the emergence of a major player in the cable industry and pursue its strategyof making its channels available on all distribution platforms."
France Telecom said the deal reflects its"progressive withdrawal from the cable business." The terms of their deal withCinven and Altice allow them to sell their remaining holdings in the mediumterm.