UPDATE 1-Vivendi buys TF1's pay-TV stake for 744 mln eur

PARIS, Nov 23 (Reuters) - Europe's biggest entertainment group Vivendi tightened its grip over its pay-TV unit Canal Plus France by agreeing to buy a 9.9 percent stake held by French broadcaster TF1 for 744 million euros ($1.11 billion).

Vivendi also offered to buy another 5.1 percent holding in Canal Plus France owned by French TV group M6, using the same valuation as the TF1 deal.

Vivendi's offer, which the French group said stood until Dec. 31, values Canal Plus France at roughly the same price as TF1's and M6's put options, which were effective as of February.

M6's put option price stood at 384.2 million euros while TF1's could sell its stake for 747.5 million euros.

Buying TF1's stake would bring Vivendi's ownership of Canal Plus France to 74.9 percent and if it took on M6's stake, that would increase to 80 percent. A Vivendi spokeswoman said M6 had not replied yet about the French group's offer.

'It would be very surprising if M6 did not sell at this price,' one Paris-based analyst said.

'This (the announcement) was expected by the markets. There is little surprise on the price,' he added.

Vivendi, whose policy is to buy out minority shareholders, could be flush with cash if it ends up selling its 20 percent stake in U.S. media group NBCU, which is valued at around $6 billion.

French media group Lagardere is also keen to sell its 20 percent stake in Canal Plus France as it wishes to raise funds for acquisitions.

Under a January 2007 shareholder pact, Lagardere has a window to sell its stake in Canal Plus between March 15 and April 15 each year until 2014.

Canal Plus France was created by the merger of pay-TV TPS with Canal Plus in a deal agreed at the end of 2006.

The Vivendi spokeswoman added that the deal would have no impact on Vivendi's debt profile because it was already accounted for on Vivendi's books in the context of its purchase of TPS in 2007.

($1=.6679 Euro)

(Reporting by Astrid Wendlandt and Leila Abboud; Editing by Jon Loades-Carter) Keywords: VIVENDI/ ([e-mail];[phone]; Reuters Messaging : [e-mail]) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.