Annual report 2014

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5 Recent events | Outlook
Section 1 Recent events
Significant events that occurred between December 31, 2014 and the
date of filing of the Document de référence (the French version of this
Annual Report) with the AMF (the French stock exchange regulatory
authority) are described in the following chapters of this report:
p p Chapter 1: “Group’s profile”, “Activities", and “Litigations”; and
p p Chapter 4: “Annual Financial Report” and “Consolidated Financial
Statements for the year ended December 31, 2014”, as approved by
the Management Board of Vivendi on February 11, 2015.
Since February 11, 2015, the main events are as follows:
p p on February 27, 2015, Canal+ Group has confirmed that it received
offers for the sale of its TVN interest in Poland and that it could
quickly enter into exclusive negotiations with one of the companies
that submitted an offer;
p
p on February 27, 2015, after review by its Management Board,
Vivendi’s Supervisory Board unanimously decided to accept the offer
of Numericable-SFR and Altice France received on February 17, 2015,
to purchase the Numericable-SFR shares held by Vivendi, which
represent 20% of the share capital of Numericable-SFR.
This transaction enables to complete the divestment of SFR under
financial conditions that result in it receiving, with respect to these
shares, a premium of 20% over the closing price for the shares on
November 27, 2014, the date of the completed SFR’ sale. The low
level of liquidity in the Numericable-SFR shares would make a future
exit under optimal conditions uncertain.
In total, Vivendi will have received €17 billion in line with the
valuation projected by Vivendi in April.
The main elements of the share repurchase agreement and the share purchase agreement are described below:
Share Repurchase Agreement Share Purchase Agreement
Party Numericable-SFR Altice France SA
Transaction Purchase by Numericable-SFR of 10% of its own shares
(48,693,922 shares)
Purchase by Altice France SA of a 10% stake
in Numericable-SFR (48,693,923 shares)
Price €40 per share, or €1,947,756,880 in the aggregate €40 per share, or €1,947,756,920 in the aggregate
Payment terms Cash on closing date p p No later than April 7, 2016 with the possibility
of advance payment of the full amount
p p Amount owed to Vivendi bears interest at 3.80% per year
p p First demand bank guarantee issued by two leading banks
Closing Date 5 working days after the Numericable-SFR Shareholders’ Meeting
which must approve, no later than April 30, 2015, the Share
Repurchase Program
Date of closing of the Share Repurchase transaction
Conditions Approval by the Numericable-SFR Shareholders of resolutions
(i) authorizing the Share Repurchase Program, and (ii)
ratifying the authorization given to the Board to ratify
the Share Repurchase Program. Altice France committed
to ensure that these conditions are met.
Completion of the Share Repurchase transaction
The completion of these transactions will terminate: (i) previous
agreements, including Vivendi’s right to a potential earn-out of
€750 million if Numericable-SFR EBITDA less Capex is at least €2 billion
in any given fiscal year through December 31, 2024, as well as the
Shareholders Agreement which notably included a non-compete clause
relating to Canal+ Group in certain sectors and territories, and (ii) the
discussions on the adjustment to the sale price for SFR based on its level
of debt as of the date of its sale, which would result in the payment by
Vivendi of €116 million.
In addition, Vivendi has been informed that the tax authorities are
challenging the merger of SFR and Vivendi Telecom International (VTI)
which occurred in December 2011 and, consequently, they intend to
contest the inclusion of SFR within the Vivendi tax group in respect of
fiscal year 2011. The tax authorities plan to require the separation of SFR
from Vivendi’s tax group for that fiscal year and will make a claim against
SFR for a total of €1,374 million, representing a principal tax amount of
€711 million plus interest and penalties of €663 million.
As part of the agreements entered into on February 27, 2015 among
Vivendi, Altice France and Numericable-SFR, Vivendi agreed to return to
SFR, if appropriate, taxes and contributions that could be borne by SFR
for fiscal year 2011 and that SFR would have already paid at that time to
Vivendi up to €711 million (including €154 million corresponding to the
use by SFR of VTI tax losses in 2011 or 2012) covering the entire period of
inclusion of SFR within the Vivendi tax group, if the merger of SFR and VTI
in 2011 were to be ultimately invalidated for tax purposes. Vivendi and
Altice France/ Numericable-SFR agreed to cooperate in order to challenge
the position of the tax authorities.
Vivendi Management believes that it has solid legal grounds on which
to defend the inclusion of SFR within the Vivendi tax group in respect of
fiscal year 2011 or, failing that, its consolidation as part of application
of the Consolidated Global Profit Tax System in respect of that fiscal
year. Therefore Vivendi believes that the agreement entered into on
February 27, 2015 between Vivendi and Altice France/Numericable-SFR
should not have a materially adverse impact on the financial position or
liquidity of the company.
In the event that the two transactions (the share repurchase and the share
purchase) are not consummated for reasons other than administrative or
judicial or for reasons attributable to Vivendi, Altice SA has agreed to pay
to Vivendi €120 million if Vivendi decides not to pursue further execution
of the agreements.
338 Annual Report 2014