PARIS, May 28 (Reuters) - U.S. private equity firm Vector Capital is seeking to gatecrash a deal between JPMorgan Chase and Technicolor, offering to buy as much as 30 percent of the French digital video company.
Technicolor shares jumped 12 percent after the company said it had received unsolicited proposals from Vector to be put to shareholders at its June 20 annual meeting.
The deal announced with JPMorgan’s Jesper Cooperatief fund had undervalued Technicolor, a London-based analyst said.
“It was time the market realised that,” he said. “Management is on Jesper’s side, so Vector will have to convince the other shareholders, which could be complicated.”
Technicolor, a provider of cinema production services and set-top boxes, is struggling with mounting debt and the loss of a contract with France Telecom.
Vector’s offer, subject to regulatory and shareholder approvals, would see the fund pay 1.90 euros per share for a 17.5 percent stake, then subscribe to a second issue to existing shareholders at 1.56 euros per share, Technicolor said.
Vector’s overall stake in the company would not exceed 30 percent, compared with 0.6 percent today. The San Francisco-based fund, which describes itself as a technology turnaround specialist, would name two directors to the Technicolor board.
Technicolor declined further comment on the Vector offer, which maintains the two-stage capital increase proposed by the company with JPMorgan on May 3.
Under that plan, JPMorgan would pay 1.60 euros per share in the initial private placement - 30 cents below Vector’s offer - with a rights issue to follow at the same 1.56 euro price.
The Vector proposal “is very close to what JPMorgan has been offering, but the conditions seem to be a little bit more in favour of the current shareholders”, a Paris-based trader said.
Technicolor has been seeking a partner for its loss-making set-top box business and a buyer for its last remaining factory making the devices in France, which filed for insolvency earlier this month. Its debt stood at 957 million euros ($1.2 billion) at the end of 2011.
Technicolor shares were up 8.9 percent at 1.52 euros as of 1302 GMT, having topped 1.57 euros earlier in the day.
Technicolor said its board would meet on Tuesday to review Vector’s proposals and the rest of the shareholder meeting agenda, to be published the following day.