By Ruth Bender
Vivendi SA swooped in with an offer for Orange SA's
video-streaming site Dailymotion, according to people familiar with
the matter, pledging to develop the French startup globally while
making sure it stays under full French control.
Vivendi, which has had its eye on Dailymotion for years, last
week made an offer to buy a controlling stake in Dailymotion after
the French government forced partially state-owned Orange to
consider offers from European companies, said the people familiar
with the matter.
Vivendi has made an offer valuing Dailymotion at around EUR250
million ($272 million), one of the people said. The owner of French
pay TV group Canal Plus and Universal Music Group wants to develop
Dailymotion globally in cooperation with similar services it
already controls or has stakes in, such as German movie and
television streaming website Watchever or Vevo, according to the
person.
Vivendi's offer comes as the French government for the second
time in two years scared a foreign company away from buying a stake
in Dailymotion, echoing an incident that has cast a shadow over
French startups' efforts to woo foreign investors.
Hong Kong-based telecommunication company PCCW Ltd. Monday
pulled out of talks with Orange to purchase a stake in Dailymotion,
after the French government publicly urged Orange to look for
European buyers for the site.
The French government's strong public stance prompted PCCW to
reconsider its approach.
"[A]n environment where policies appear to favor a French or
European solution is discouraging for international business
participation," PCCW said in a statement. "We will therefore
withdraw from our discussions with Dailymotion and its current
owners."
The collapse of the PCCW talks marks the second time that a near
deal between Orange and a foreign company has fallen apart after
intervention from the French government, a setback for a country
that is trying to attract more foreign investment to boost its
economy.
In 2013, then-Industry Minister Arnaud Montebourg prevented
Orange from selling a majority stake in the site to U.S. Web giant
Yahoo Inc. After the deal fell apart, Mr. Montebourg said the U.S.
tech firm might have "devoured" a French jewel. Local media have
since referred to the incident as the "Dailymotion affair."
The blockage created a furor both inside and outside France,
with some American companies and venture capitalists saying they
had become more reluctant to make purchases in the country.
After Mr. Montebourg left the cabinet last year, the French
government signaled it was more open to the idea of a foreigner
joining with Orange in Dailymotion.
Dailymotion appeared close again to finding a foreign buyer last
month when Orange's management told its board that it intended to
enter into exclusive talks with PCCW over a deal to sell a 49%
interest in Dailymotion, according to people familiar with the
matter.
But it was French Economy Minister Emmanuel Macron who last week
urged Orange to explore European buyers before entering into the
final phase of negotiations with a foreign investor, allowing
Vivendi to come forwards with an offer.
Vivendi's Canal Plus has been interested in buying Dailymotion
for years but failed to reach an agreement with Orange. Orange
wanted to hold on to a controlling stake while Vivendi also wanted
control, according to people familiar with the matter.
If Vivendi's new offer is accepted, the purchase of Dailymotion
would mark the company's first strategic acquisition under Chairman
Vincent Bolloré. Mr. Bolloré, who has been tight lipped about what
he has in mind for Vivendi, in recent weeks has come under fire
from a minority shareholder.
Orange is expected to review Vivendi's new offer at a board
meeting Tuesday, said the person familiar with the matter, along
with potential rival offers. Orange declined to comment Monday.
It wasn't immediately clear how many other potential partners
had come forward since Mr. Macron stepped in. According to people
familiar with the matter, French financial-services company Fimalac
was also among interested bidders. Fimalac didn't respond to
requests for comment.
The French government Monday defended Mr. Macron's decision to
block Orange from entering into a deal for exclusive talks with
PCCW. "This is a wise shareholder decision that has allowed for
discussions with several potential bidders," a spokeswoman for Mr.
Macron said.
Rick Carew contributed to this article.
Write to Ruth Bender at Ruth.Bender@wsj.com
Access Investor Kit for Fimalac SA
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=FR0000037947
Access Investor Kit for Société d'Edition de Canal Plus SA
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=FR0000125460
Access Investor Kit for Vivendi SA
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=FR0000127771
Access Investor Kit for Orange SA
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=FR0000133308
Access Investor Kit for PCCW Ltd.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=HK0008011667
Access Investor Kit for Orange SA
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US6840601065
Access Investor Kit for PCCW Ltd.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US70454G2075
Access Investor Kit for Vivendi SA
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US92852T2015
Subscribe to WSJ: http://online.wsj.com?mod=djnwires