In September 1996, Richemont and MIH announced the disposal of their pay television interests

In September 1996, Richemont and MIH announced the disposal of their pay television interests held through Nethold, including a 45% shareholding in Telepiù, to Canal+. In the context of the usual post-closing audit procedure that followed this acquisition, Canal+ has identified a difference of approximately 15% in the number of active Telepiù subscribers, being principally analogue subscribers, as at 31 August 1996 compared to the number warranted by Richemont and MIH. The agreement between Canal+, Richemont and MIH specifically provides for Canal+ to be compensated for any shortfall identified in the course of such a post closing audit.

During a meeting of the board of Canal+ held today, Mr Johann Rupert, Chief Executive of Richemont and a director of Canal+, strongly restated his confidence in the management of Canal+ and Richemont’s intention of resolving this matter rapidly and amicably. The parties have therefore agreed to establish the amount of the compensation due to Canal+ within the next 30 days.

Mr Rupert said: "The agreements between Canal+, Richemont and MIH specifically provide for such post closing adjustments and we are most confident that we will resolve the matter quickly and amicably. We are very satisfied with our investment in Canal+ and with the progress achieved by its management."

Mr Pierre Lescure, Chairman and Chief Executive Officer of Canal+, said: "The agreements entered into with Richemont and MIH in connection with the Nethold contribution will allow us to resolve this matter in the best interests of Canal+. The outlook for the development of our business in Italy remains most promising, as exemplified by the number of digital subscribers which has risen from 5,000 as at 31 August 1996 to over 160,000 as at the end of October 1997."

Richemont is a 15% shareholder in Canal+. It is anticipated that any compensation payable to Canal+ will be adequately covered by available provisions and, consequently, that the settlement of any such claims will have no impact on earnings in the current year.