PARIS (Reuters) - The board of directors of French digital video specialist Technicolor (TCH.PA) has backed a plan for U.S. bank JPMorgan Chase (JPM.N) to take a stake of up to 29.96 percent over a rival offer from private equity firm Vector Capital.
The board will recommend that shareholders back the deal, which will see JPMorgan boost its holding in the group through a two-step capital hike, Technicolor said in a statement on Wednesday.
“Technicolor will benefit from its association with JP Morgan Chase and Co, its global brand, its experience and industry expertise,” Technicolor said.
The proceeds from the capital increase of up to 158 million euros ($198 million) will “allow Technicolor to reduce its financial debt, increase headroom on financial covenants and benefit from JPMorgan Chase and Co’s active support in further improving its balance sheet”.
Technicolor added that Vector’s plan to buy as much as 30 percent of the French company would be back on the table only if shareholders rejected the JPMorgan plan at a meeting on June 20.
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Reporting by James Regan; Editing by Mark Potter