And then there was one.
The summerlong bidding derby to determine who will own Vivendi Universal
Entertainment appears to be over, with an announcement today that French parent
Vivendi Universal’s board has given preliminary approval to begin exclusive
negotiations to sell the unit to General Electric Co.’s NBC entertainment
The combined entertainment assets -- which include Vivendi’s Universal
Studios; cable networks USA Network, Sci Fi Channel and Trio; and various
theme-park outlets on one side and NBC’s broadcast properties plus cable
networks CNBC, MSNBC and Bravo on the other -- would be worth more than $40
billion, generating an estimated $13 billion in 2003 operating revenue.
If the deal is closed, VUE shareholders would receive a $3.8 billion cash
consideration based on GE’s stock-issue commitment, and the company would see a
$1.6 billion debt reduction. But that still depends on Vivendi and NBC hammering
out a deal and getting regulators in France and the United States to sign
"VU is proud that it would have a 20% stake in such a company, and I am
personally happy to have the opportunity to merge VUE into an entity that will
provide VUE with the complementary assets and means to develop its operations to
the fullest," Vivendi chairman Jean-Rene Fourtou said in a release.
As of last week, the bidding field for VUE had narrowed to two competitors --
NBC and a group led by former Vivendi vice chairman Edgar Bronfman Jr.
While neither reportedly came up to the $14 billion asking price, the
deciding factor may have been that the proposed NBC deal will have Vivendi
retaining a 20% minority ownership in an NBC-run VUE, therefore keeping its hand
in the Hollywood entertainment industry.
The French media corporation would also have the option to sell its stake
wholly or in part over time and to raise cash based on a future GE commitment to
buy out its stake. That contrasted with the deal reportedly offered by
Bronfman’s group, which would have offered a cash buyout.