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4
Notes to the 2014 Statutory Financial Statements
Financial Report | Statutory Auditors’ Report on the Consolidated Financial Statements | Consolidated
Financial Statements | Statutory Auditors’ Report on the Financial Statements |
Statutory Financial Statements
3. Notes to the 2014 Statutory Financial Statements
Preliminary Note: dollar amounts are expressed in US dollars.
Significant Events in 2014
■
■
Sale of SFR
On November 27, 2014, pursuant to the agreement entered into on June 20, 2014 and following approval by the French Competition Authority on
October 27, 2014 subject to conditions (see below), Vivendi announced the closing of the combination between SFR and Numericable. The main terms
of this transaction are as follows:
Cash proceeds
€13.5 billion, subject to the sale price adjustment: on November 27, 2014, Vivendi received €13.366 billion in cash and,
on December 3, 2014, Vivendi made a contribution of €200 million to the financing of the acquisition of Virgin Mobile
by Numericable Group. Under the terms of the agreement, the price adjustment to be calculated is based, among
other things, on any exceptional changes in the net working capital, SFR’s net debt, as well as certain restatements
as contractually defined by the parties and is subject to a contradictory accounting analysis in accordance with the
contract.
Vivendi’s interest
in the combined entity
20% of Numericable-SFR (publicly-listed).
Altice’s interest
in the combined entity
Approximately 60% of Numericable-SFR (approximately 20% free float).
Earn-out
Earn-out of €750 million if the EBITDA-Capex aggregate of the combined entity is equal to or higher than €2 billion
during any fiscal year, ending not later than December 31, 2024.
Commitments given
Limited representations and warranties.
Governance
p
p
Minority representation for Vivendi on the Board of Directors, or 2 out of 10 Directors, subject to Vivendi retaining
a 20% interest in Numericable-SFR (1 Director if Vivendi holds an interest between 10% and 20%).
p
p
Veto rights on certain exceptional matters subject to Vivendi retaining a 20% interest in Numericable-SFR.
p
p
Numericable-SFR has notably given the French Competition Authority an undertaking not to disclose any strategic
information on the pay-TV market, the distribution of pay-TV services, or ultramarine telecommunications markets
to Vivendi.
Liquidity - Lock-up period
p
p
Standard 180-day lock-up period, including restrictions on any disposal or transfer of shares or equivalent
transactions, following the date of settlement-delivery of the rights issue of Numericable Group (on November 20,
2014), at the request of the underwriting banks.
p
p
Lock-up period until the end of November 2015, after which Vivendi may sell or distribute its Numericable-SFR
shares, without restrictions, with a right of priority granted to Altice (pre-emption right or right of first offer).
p
p
Vivendi has agreed not to acquire any Numericable-SFR shares, directly or indirectly, until June 30, 2018.
p
p
Subject to Vivendi retaining its shares, Altice will have a call option at market value (subject to a floor
(a)
)
on Vivendi’s interest, exercisable in three tranches (7%, 7%, 6%) over one-month window periods starting
on June 1, 2016, June 1, 2017 and Ju
ne
1, 2018.
p
p
Tag-along rights for Vivendi if Altice sells its shares.
(a)
Volume Weighted Average Price (VWAP) of Numericable Group’s share price over the 20 business days before the closing date (which occurred
on November 27, 2014), €29.46, grossed-up at an annual rate of 5% during the period ranging from the closing date until the date of exercise
of the call option.
The disposal of SFR resulted in the recognition of an overall positive
income of €4,029.5 million, realized on the sale and the contribution of
the SFR shares to Numericable. It is divided among: (i) a capital loss of
€6,963.5 million on the sale and contribution of SFR shares; (ii) a reversal
of impairment of €11,193.0 million; and (iii) an exceptional charge of
€200 million related to Vivendi’s participation in the financing of the
acquisition of Virgin Mobile (see Note 4, Net Exceptional Items, and
Note 7, Long-term Investments).
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Annual Report 2014