Vivendi Universal S.A. has reopened talks concerning the sale of its U.S. programming assets to oil billionaire Marvin Davis, according to published reports last week. No imminent deal is expected, though.
Vivendi and Davis met Feb. 2 to discuss his $20 billion offer for Vivendi Universal Entertainment. Davis had originally made the offer in November — $15 billion in cash and the assumption of $5 billion in debt.
Vivendi officials declined comment.
Although Vivendi rejected the November offer as too low, reports in the Los Angeles Times
last week said Davis indicated he may sweeten his bid.
In addition, the newspaper reported that Davis may also be formulating a plan for Vivendi to sell him the assets — which include cable channels USA Network and Sci Fi Channel, as well as the Universal movie studio and Universal Music Group — and manage to avoid a large tax payment to USA Interactive, the online company owned by VUE chairman Barry Diller.
USA Interactive — of which Diller is also chairman — owns a 5.5 percent stake in VUE. The company has said in the past that Vivendi would be required to pay it as much as $2 billion in the event of a sale. Vivendi has claimed the payment is closer to $1 billion.
In December, USAI filed documents with the Securities and Exchange Commission which claimed Vivendi had reneged on $620 million in payments for the company to offset taxes it must pay as a result of the sale of the cable networks last year.
But according to the Los Angeles Times, which cited unnamed sources, Davis and his team of lawyers have proposed buying an obscure holding company that actually controls the entertainment assets. By taking this route, Vivendi can sell the U.S. assets without triggering the restrictions in the agreement with USAI.
Recently, Vivendi has been aggressive in selling assets to pay down its $17 billion debt. So far, it has disposed of several non-core properties for a total of $6.8 billion.
Last week, the company said it sold its consumer press division to Socpresse for $216 million and closed the sale of its 89 percent interest in Canal Plus Technologies to Thomson Multimedia for $205 million.
Published reports said last week that while Vivendi chairman Jean-Rene Fourtou is in discussions with Davis, he has stressed that he wants to field other offers for the U.S. assets.
Diller, for his part, is also rumored to be teaming up with Liberty Media Corp. to launch a bid for VUE. One possible scenario would have Liberty combining its Starz Encore Group LLC premium networks with VUE, then spinning off the unit in an initial public offering.
Last week, on USA Interactive's fourth-quarter conference call with analysts, Diller said his company is working with Vivendi to find a solution to the VUE partnership.