By Elena Berton
PARIS—Media company Lagardère /zigman2/quotes/206737784/delayed FR:MMB +0.33% SCA said Friday it will pursue an initial public offering for its 20% holding in French pay-TV channel Canal Plus, after failing to sell the stake to Vivendi /zigman2/quotes/202179234/delayed FR:VIV +0.26% SA.
But analysts questioned the likelihood of an IPO, saying the move could be an option to test market appetite and possibly increase pressure on Vivendi.
Vivendi controls 80% of Canal Plus, a unit of its Canal Plus Groupe. Under the conditions of a Canal Plus shareholder agreement, Lagardère first has to offer its stake to Vivendi, but can sell its holding in the market if the two group fail to agree on a deal.
Lagardère has repeatedly said it wants to sell its stake in Canal Plus, and Chief Financial Officer Dominique D'Hinnin said late last year that Vivendi would be the likely buyer, but this would depend on the price.
Kepler analyst Conor O'Shea said Lagadère's move toward an IPO may be a ploy to convince Vivendi to resurrect their talks. "A successful IPO is not guaranteed, and though Vivendi has the means and the motivation to do this deal early, there is no guarantee that this ploy will get it back to the negotiating table," he said.
Shares of Lagardère, which have lost around 14% of their value since the beginning of 2010, were up 0.4% at €24.63 ($30.83), on a slightly higher Paris market. Vivendi shares rose 1.2% to €16.49.
Ruth Bender in Paris contributed to this article.
Write to Elena Berton at email@example.com