Vivendi assets a hot ticket in show business as bidders sweeten offers
Copyright 2003 Gannett Company, Inc.
July 1, 2003 FIRST EDITION
New York — The competition for Vivendi Universal's prized entertainment assets has intensified as directors prepare to meet today to winnow out some of the initial offers submitted last week.
Liberty Media, NBC, MGM, Viacom and groups led by former Seagram CEO Edgar Bronfman Jr. and oil billionaire Marvin Davis are interested in Universal Studios and USA Networks — and, in some cases, Universal Music.
Bidders continued to strengthen their hands:
MGM added resources to its bid for the movie, TV and theme-park units on Monday by agreeing to take $500 million for its 20 percent stake in cable channels American Movie Classics, Independent Film Channel and WE: Women's Entertainment. "They're very serious," says Gerard Klauer Mattison's Jeffrey Logsdon. "They have a fully financed bid."
MGM's sale to majority owner Cablevision Systems also helps Bronfman's offer for the assets — including the music company. Cablevision will own 100 percent of the channels, which it agreed to contribute to Bronfman's new consortium in exchange for about 33 percent of the equity.
Liberty Media's John Malone has simplified his effort to buy Vivendi's assets — with or without the music unit — by agreeing with Comcast to stop the clock in the plan to unravel their QVC partnership, people close to the companies say.
Malone started the process in March. He exercised his right to require Comcast to buy Liberty's 42.5 percent of QVC or, if it declined, to sell its 57.5 percent to Liberty. But Liberty's desire to buy QVC will probably wane if it wins the Vivendi sweepstakes.
Malone said last month that bankers chosen by each company had completed their valuation of QVC. Analysts say it could be about $7 billion. Comcast and Liberty declined to comment.
Davis' bid for all the properties, including music, may be hampered by growing speculation about his health. Davis, 77, was rushed to a hospital several weeks ago after collapsing in his office in Los Angeles, according to people who have been told about the incident. They believe he suffered diabetic shock.
Davis spokesman Allan Mayer wouldn't confirm or deny that report. But he says that Davis "had knee surgery a couple of weeks ago and developed an infection. He is now at home recovering."
Mayer adds that Davis' group "is pursuing this Vivendi bid as vigorously as it ever has."
Meanwhile, Vivendi said Monday that a U.S. arbitration panel has ruled it owes ex-CEO Jean-Marie Messier — whose buying spree made Vivendi an entertainment giant but brought the former French water utility to the financial brink — $23.5 million in severance. The company said it will contest the decision.