Bronfman may head bid for Universal
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Los Angeles Times
May 21, 2003 Wednesday Home Edition
Another bidder has entered the fray for control of Vivendi Universal's U.S. entertainment assets — someone whose family used to own them.
Edgar Bronfman Jr., Vivendi's vice chairman, is attempting to put together an investment group to reclaim the assets his family sold to Vivendi in 2000 for $34 billion. They include Universal's movie studio, theme parks, cable channels and music company, the world's largest.
Bronfman, who once headed the studio and music company, said late Tuesday that one investment partner might be Cablevision Systems Corp., one of the nation's largest cable providers, with such channels as AMC, Women's Entertainment Network, IFC, Fuse Music Network and several regional sports channels.
"I built these assets, I recruited these management teams. I just feel there's a whole lot of blue sky that we can continue to create together," Bronfman said in an interview. "I feel strongly these assets were best advantaged by being kept together rather than being sold piecemeal."
With the exception of an investment group headed by oil tycoon Marvin Davis, the prospective bidders have expressed interest in buying only pieces of the Universal empire, not the entire group. Those bidders, which are expected to submit offers in the coming months, include Viacom Inc., Liberty Media Corp., General Electric Co.'s NBC and MGM Studios.
According to sources familiar with the possible Bronfman offer, he wants to bulk up the Universal operation by combining its cable channels — SciFi and USA Network — with some of Cablevision's channels to create "more of a critical mass."
Bronfman said he decided to put together an offer earlier this month after Vivendi Chief Executive Jean-Rene Fourtou declared unequivocally that the company wanted to exit Hollywood in order to refocus on its telecom business and slash the huge debt created under the tenure of former CEO Jean-Marie Messier.
Messier's efforts to transform a water utility into the world's second-largest media company created a financial crisis and hammered investors, including the Bronfman family, who saw the value of their stake in Vivendi fall by more than $1 billion. Bronfman — who played a key role in Messier's ouster from the board last summer — declined to discuss financial terms of his possible offer.
Sources close to the negotiations said Wachovia Corp. and Merrill Lynch would be involved in the financing and that Bronfman has approached several private equity firms. The sources said the deal would involve Edgar and his father, but not Charles Bronfman, Edgar's uncle.
To avoid any conflict, Edgar and his father have agreed to suspend their participation in Vivendi board meetings, sources said.
The Bronfman family gained control of the Universal entertainment assets in 1995, when Seagram Co., which the family controlled, purchased MCA Inc. from Matsushita of Japan. Six years later, Vivendi acquired Seagram.