By Sam Schechner and Marc Daniel

PARIS--Technicolor SA (TCLRY, TCH.FR) shareholders Wednesday approved a cash injection from the U.S. investment firm Vector Capital, capping a surprise bidding war with rival J.P. Morgan Chase & Co. (JPM) over a minority stake in the troubled French technology and media services firm.

The deal will inject as much as 191 million euros into the coffers of Technicolor, four-fifths of which will be used to pay down the company's roughly EUR1 billion in net debt. The rest will be used to help reorient the company away from its money-losing TV set-top-box business and toward other businesses, like digital media services, where the company holds a slew of patents.

In return, Vector will end up with just under 30% of Technicolor's equity.

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"We see a company that needs our help, which has too much debt, needs capital, need assistance," said Alex Slusky, Vector's founder and managing partner, in an interview ahead of the vote. He said Vector is prepared to deploy additional capital if necessary.

The vote at Wednesday's annual meeting brought a denouement to a bidding war over a company that has been reeling from debt--and questions over the future of some of its biggest businesses. Since Vector first announced its rival bid to J.P. Morgan's, in late May, Technicolor's stock has shot up nearly 40%. Shares Wednesday closed up 4.8% at EUR2.18.

Technicolor, which takes its name from its iconic U.S. media-processing division, has been struggling, especially because of its set-top-box business in France. The French government has said it is closely monitoring the situation at Technicolor because the company has said it may need to sell or close one its French factories that makes set-top boxes.

After seeking an investor to help reshape the company, the board had initially sealed a deal in early May with J.P. Morgan, only to see Vector swoop in with a sweetened offer later that month.

The Technicolor board later rejected a boost in J.P. Morgan's offer because of what it described as onerous conditions. The board continued to recommend the original J.P. Morgan deal, in part because it was contractually obliged to, but some shareholders and outsiders recommended the Vector offer.

Digital video technology--and especially Technicolor's trove of patents--were among the most attractive features of Technicolor for both Vector and J.P. Morgan, according to a person familiar with their discussions with the company. "The most valuable part of the business is the intellectual property portfolio," Mr. Slusky said, adding he would support further investments in buying intellectual property or developing more through in-house research.

Meanwhile, Mr. Slusky said the set-top-box business needs serious restructuring because it does not have the scale to compete. "You either need to sell, buy or joint venture," he said, adding he would prefer to allocate capital to intellectual property.

Write to Sam Schechner at Sam.Schechner@wsj.com and Marc Daniel at Marc.Daniel@dowjones.com

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