Orange CEO says not planning to buy Vivendi's Canal Plus

By Mathieu Rosemain and Gwenaëlle Barzic

PARIS (Reuters) - Leading French telecoms group Orange does not plan to buy Vivendi's Canal Plus pay TV business but is open to a partnership on sports rights, Chief Executive Stephane Richard said on Thursday.

The two had until now been discussing a possible move by Orange to buy a stake in Canal Plus, which is wholly-owned by media giant Vivendi, according to sources close to the matter.

However, Richard indicated a change of tack on Thursday.

"No, I don't want to buy Canal Plus," Richard said in an interview with BFM Business radio station.

"Orange and Canal Plus are important partners. Can we do more together? For sure, but on a industrial and commercial basis, not through a stake acquisition."

Richard was speaking after Orange reported a 1.3 percent increase in its yearly core operating profit, helped by strong sales in Spain and a reduction in labour costs.

Orange has a distribution agreement with Canal Plus.

French business newspaper Les Echos reported this month that Orange and Canal Plus were considering setting up a new commercial venture to address strong competition from SFR Group, the country's second-biggest telecoms operator.

"Everybody knows that there's one player relatively aggressive in building an offer in sports rights," Richard told financial analysts in an apparent reference to SFR which has bought rights to show English Premier League soccer in France.

Canal Plus has rights to show matches from France's Ligue 1 and European Champions League soccer.

Richard's comments highlight the difficulties the company has faced in a rapidly-changing sector, which faces new competition from Netflix, Amazon and other new TV content providers globally.

Group revenues rose by 0.6 percent to 40.92 billion euros - the first time group turnover had increased on a yearly basis since the global financial crisis of 2008.

Orange also said it would increase its dividend per share in 2017 by 0.5 euros to 0.65 euros.

($1 = 0.9473 euros)

(Reporting by Mathieu Rosemain and Gwenaelle Barzic; Editing by Sudip Kar-Gupta and Keith Weir)