Copyright 2003 Denver Publishing Company
Rocky Mountain News (Denver, CO)
June 17, 2003 Tuesday Final Edition
Arapahoe County-based Liberty Media Corp. could be less than a week away from a multibillion-dollar bid for the U.S. assets of Vivendi Universal Entertainment.
Despite one report that Liberty is contractually restricted from pursuit of the assets, Liberty Chairman John Malone apparently met with a top Vivendi executive last week to discuss a deal.
A source close to Vivendi said the multimedia giant will accept bids - expected to fall between $12 billion and $20 billion - until Monday. At that point, Vivendi will spend an undetermined period reviewing the bids, the source said.
According to media reports, Liberty and five other parties have lined up to submit bids. They are MGM, Viacom, NBC, Marvin Davis and Edgar Bronfman.
Malone met with Chief Operating Officer Jean Bernard-Levy, the Financial Times reported.
Vivendi is a conglomeration of theme parks, movie studios, music publishers, video-game producers and cable TV networks, including USA Networks and its Sci Fi Channel. Liberty probably would like to combine the movie studios with Liberty's wholly owned subsidiary, Starz Encore Group, which supplies movies to cable operators, said industry analyst Ted Henderson of Stifel, Nicolaus & Co.
Liberty owns 20 percent of USA Interactive, which previously included USA Network among its assets. Liberty received 3.5 percent of Vivendi in the deal that left Vivendi with 97 percent control of USA Networks. A clause in that deal prohibits Liberty from acquiring Vivendi or any of its subsidiaries, reported TelevisionWeek, a weekly trade publication.
A Liberty spokesman declined to comment on the report.
Henderson suggested that Malone would not waste his time in meetings and negotiations on a deal that is theoretically impossible to complete. "They want to take a look at operating assets rather than passive stakes, and Vivendi has some attractive entertainment assets," Henderson said.
At this point, he said, there is no reason to think that Liberty has an edge over other bidders. "In fairness, they took a look at DirecTV (satellite TV company), too," he said. "And they didn't pursue that."
Complicating any possible negotiations between Liberty and Vivendi is a pending legal complaint by Liberty against Vivendi. Liberty sued over Vivendi's alleged failure to disclose issues of the company's financial health during the USA Networks deal.