Vivendi Ponders VUE IPO
By Mike Farrell -- Multichannel News, 6/18/2003 5:00:00 AM
Vivendi Universal chief financial officer Jacques Espinasse said the French conglomerate would consider an initial public offering for its U.S. entertainment assets, just days before it is expected to begin fielding initial bids for those properties.
Vivendi has said in the past that an IPO was a possibility, but the declining stock market made it highly unlikely. But as the markets have rebounded in the past few months, Espinasse said a Vivendi Universal Entertainment IPO has re-emerged as an option.
"Given the return of the capital markets both in New York and Paris, we are also seriously considering as an alternative solution an IPO," Espinasse said on the call. "We do feel that it is a realistic solution. It is not a fall-back solution -- it is an alternative solution depending on the level of offers we will get."
Vivendi has had its U.S. assets -- VUE, consisting of cable channels USA Network, Sci Fi Channel, NewsWorld International and Trio; Universal Studios; and Universal Theme Parks -- on the block for months.
At least six companies have expressed some interest in submitting bids for all or part of VUE -- Liberty Media Corp., General Electric Co.'s NBC television network, Viacom Inc., former Vivendi vice chairman Edgar Bronfman Jr. (expected to team up with Cablevision Systems Corp. and several private-equity firms), Metro-Goldwyn-Mayer Inc. and Texas oil billionaire Marvin Davis.
So far, only Davis has submitted a bid -- $20 billion -- that was rejected by Vivendi in November as being too low. However, published reports said Liberty met with VUE officials last weekend and the initial rounds of bids were expected June 23.
Espinasse didn't give an exact date, but he said the company expects to have bids soon.
"There are a multiplicity of buyers that have expressed interest," Espinasse said. "We are getting close to collecting the copies of each one of the offers."
But Espinasse made it clear that Vivendi will not be forced to sell VUE for an unattractive price.
"We are not in a corner," Espinasse said. "The process is clearly monitored, controlled and run by [Vivendi]."
VUE's operating income was down 23% in the first quarter -- to $250 million from $325 million -- which could cause some bidders to reduce their offers.
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