Lagardere unveils EUR 900m write-down

(PARIS) - French media group Lagardere said on Tuesday it would cut the value of its assets by about 900 million euros ($1.18 billion) to account for the poor performance of sports and pay TV operations.

Lagardere, which publishes the Asterix comics series and owns many magazines including the titles "Elle" and "Paris Match", has drawn conclusions from weak second-half 2011 results, in particular at its Unlimited sports divison.

The group is also writing down the value of a 20-percent holding in Canal+ France, a pay television channel channel, which along with Europe 1 is part of its broadcast media activites.

Shares in the parent media group showed a sharp loss of 3.56 percent to 22.32 euros in midday trading on the Paris stock exchange, while the CAC 40 index of leading shares was off by 0.29 percent overall.

The news suggests that Lagardere could post substantial losses in its core activities for the 2011 fiscal year, given that it reported a net profit of just 163 million euros in 2010.

Lagardere will benefit from its substantial stake in the European aerospace group EADS however.

But the CM-CIC brokerage said in a research note that "we remain prudent regarding Lagardere, only the perspective of an IPO (initial public offer) of Canal + and a return of cash to shareholders" could correct negative sentiment on the company.

The Lagardere statement said that operating profit at its media division, which has already been revised lower twice, would fall by five to 12 percent in its 2011 results at constant exchange rates.

Sales last year dipped by 3.9 percent to 7.6 billion euros, a level already anticipated by CM-CIC.