Page 172 - 2012 Annual Report

172 VIVENDI l 2012 l Annual Report
FINANCIAL REPORT – CONSOLIDATED FINANCIAL STATEMENTS – STATUTORY AUDITORS’ REPORT ON THE
CONSOLIDATED FINANCIAL STATEMENTS – STATUTORY AUDITORS’ REPORT ON THE FINANCIAL STATEMENTS –
STATUTORY FINANCIAL STATEMENTS 4
4
I - 2012 FINANCIAL REPORT
SECTION 1 MAJOR EVENTS
1.1.2. Acquisition of Bolloré Group’s channels by Vivendi and Canal+ Group
On December 2, 2011, Bolloré Group and Canal+ Group announced the
entry into a definitive agreement regarding the acquisition by Canal+
Group of Bolloré Group’s free-to-air channels, Direct 8 and Direct Star.
In February 2012, Canal+ Group exercised its option to acquire, in one
transaction, a 100% interest in Bolloré Group’s television business, in
exchange for the issuance of Vivendi shares.
On September 27, 2012, Vivendi carried out a share capital increase of
22,356 thousand shares, which it paid in consideration for the contribution
made by Bolloré Media, representing an enterprise value of €336 million.
After taking into account a €16 million price adjustment related to debt and
changes in working capital, the fair value of the transferred counterparty
amounted to €320 million. Bolloré Group committed to retain the Vivendi
shares received in connection with the completion of this transaction for
a minimum period of six months after September 27, 2012. Since that
date, Vivendi and Canal+ Group have been granted guarantees capped at
€120 million. These guaranties expire 3 months after the expiration of the
applicable statute of limitations for tax or social matters, and 18 months
after September 27, 2012 for all other matters. D8 and D17 have been fully
consolidated since September 27, 2012 and were renamed D8 and D17, in
connection with their launch on October 7, 2012.
As part of the French Competition Authority’s approval of the transaction on
July 23, 2012, Vivendi and Canal+ Group undertook certain commitments.
These commitments provide for restrictions on the acquisition of rights for
American movies and television series from certain American studios and
for French movies, the separate negotiation of certain rights for pay-TV
and free-to-air movies and television series, limitations on the acquisition
by D8 and D17 of French catalog movies from StudioCanal, and the
transfer of rights to broadcast major sports events on free-to-air channels
through a competitive bidding process. These commitments are made for
a 5-year period, renewable once if the French Competition Authority, after
having performed a competitive analysis, deems it necessary. In addition,
on September 18, 2012, the French Broadcasting Authority (Conseil
Supérieur de l’Audiovisuel) approved the acquisition of these channels,
subject to certain commitments relating to broadcasting, investment
obligations, transfer rights, and the retention by Canal+ Group of the D8
shares for a minimum period of two and a half years.
Following the closing of this transaction, Bolloré Group reported having
increased its interest in Vivendi SA to 4.41%. Subsequently, on October
16, 2012, it announced that it had crossed the 5% threshold in Vivendi SA’s
share capital.
On December 13, 2012, Vivendi’s Supervisory Board co-opted Vincent
Bolloré, Chairman and Chief Executive Officer of the Bolloré Group, as
a member of the Supervisory Board. This cooptation will be submitted
for ratification at the General Shareholders Meeting to be held on
April 30, 2013.
For a detailed description of this transaction and its impact on Vivendi’s
financial statements, please refer to Note 2.2 to the Consolidated Financial
Statements for the year ended December 31, 2012.
1.1.3. Strategic partnership among the Canal+ Group, ITI, and TVN in Poland
In accordance with the agreement announced on December 19, 2011, and
following the receipt on September 14, 2012 of unconditional approval
from the Polish Competition and Consumer Protection Authority, on
November 30, 2012, Canal+ Group, ITI, and TVN finalized the combination
of their Polish Pay-TV platforms, which remain controlled by Canal+ Group,
and the acquisition by Canal+ Group of a 40% interest in N-Vision, which
has been accounted for under the equity method since that date.
Following the merger of Canal+ Cyfrowy (Canal+ Group’s Cyfra+ platform)
with ITI Neovision (TVN’s “n” platform), which created a new satellite
TV platform in Poland, with a base of 2.5 million customers, Canal+
Group owns a 51% interest in the new structure “nc+” (compared to
a previous 75% interest in Canal+ Cyfrowy); TVN and UPC own a 32%
and 17% interest, respectively. As Canal+ Group has the majority on the
Supervisory Board and the power to govern the financial and operating
policies of “nc+”, the latter has been fully consolidated by Canal+ Group
since November 30, 2012.
For a detailed description of this transaction and its impact on Vivendi’s
financial statements, please refer to Note 2.3 to the Consolidated Financial
Statements for the year ended December 31, 2012.
1.1.4. Liberty Media Corporation Complaint
On June 25, 2012, a verdict was returned by the jury against Vivendi in a
lawsuit filed by Liberty Media Corporation and certain of its subsidiaries
before the US District Court for the Southern District of New York. The
jury awarded damages to Liberty Media Corporation in the amount of
€765 million.
On January 9, 2013, the Court confirmed the jury’s verdict. It also awarded
pre-judgment interest accruing from December 16, 2001, using the
average rate of return on one-year US Treasury bills, or €180 million. On
January 17, 2013, the Court entered a final judgment in the total amount
of €945 million, including pre-judgment interest, but stayed its execution
while it considered two pending post-trial motions, which were denied
on February 12, 2013. On February 15, 2013, Vivendi filed with the Court
a Notice of Appeal against the judgment awarded, for which it believes it
has strong arguments.
On the basis of the verdict rendered on June 25, 2012, and following
the entry of the final judgment by the Court, as of December 31, 2012,
Vivendi accrued a reserve in the amount of €945 million. Please refer
to Note 27 to the Consolidated Financial Statements for the year ended
December 31, 2012.