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Vivendi, Murdoch seal pay-TV deal
PARIS, France -- Vivendi Universal has agreed to sell its loss-making Italian pay television unit Telepiu to Rupert Murdoch's News Corporation in a long-awaited deal worth about 900 million euros ($888 million). News Corporation said it would pay 470 million euros in cash for Telepiu and assume 423 million euros of its debt. Under the deal, Murdoch's group will own an 80 percent stake in Telepiu, while Telecom Italia -- its partner in Telepiu rival Stream -- will control the remainder. Telepiu and Stream are expected to be merged to create Italy's dominant pay-TV operator. The purchase still needs to be approved by European Commission regulators. Vivendi and News Corporation have been in talks concerning Telepiu for months, but progress has been delayed due to disagreements over the value of the unit and by threats of law suits between them. These stem from a failed deal to merge their Italian pay-TV operations. "This is a world class property in an untapped market without cable competition," Murdoch told an investors' conference in New York. "We would expect to see immediate subscriber growth, the elimination of piracy, and compelling programming." In July, Vivendi -- the world's second largest media group -- named Jean-Rene Fourtou to replace chief executive Jean-Marie Messier. Vivendi is struggling with debts of about 19 billion euros built up after Messier's two-year multi-billion-euro spending spree to create a media group to rival AOL Time Warner. Last week, Vivendi said it would sell assets worth 12 billion euros over the next 18 months. Meanwhile, Fourtou was quoted on Tuesday as telling trade union representatives in Paris that he was impressed with an offer from magazine publisher Lagadere for Vivendi's publishing business. "Jean-Rene Fourtou told us that Lagardere made the offer that interested him most," Elisa Perrot, representative of the CGT trade union, told reporters following a union meeting on strategy with Fourtou. However, Vivendi later denied that Fourtou had characterised the Lagardere offer as the most attractive. Vivendi (PEX) shares climbed 5 percent to 11.92 euros in mid-afternoon trading in Paris.
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