USA Interactive agreed to buy the outstanding warrants to purchase its stock
held by Vivendi Universal for about $407.4 million -- a deal that removes some
restrictions from Vivendi's ability to sell its Vivendi Universal Entertainment
unit to a third party.
In a press release, USAi said Friday that it would purchase warrants to
acquire 16.2 million USAi shares with an exercise price of $32.50 per share and
12.1 million USAi shares with an exercise price of $37.50 each, for a total
purchase price of $407.4 million. The deal is expected to close later this
USAi declined to comment beyond the press release.
In a securities filing April 15, USAi stated that any sale of Vivendi's VUE
assets would require permission from the holders of those warrants: Liberty
Media Corp., USAi and USAi chairman Barry Diller. By buying the warrants and
shares, that restriction is removed.
Vivendi could have sold its interest in VUE to a third party before, but the
new buyer would have had to reach a separate agreement with USAi for those 56.6
Upon completion of the USAi deal, Vivendi will continue to hold 56.6 million
shares of USAi stock, indirectly through Universal and its affiliates.
But those 56.6 million shares must continue to be held by Universal and its
affiliates free of liens and generally in special-purpose entities until USAi's
class-B preferred interests in VUE are redeemed, which can occur no earlier than
In addition, Diller will continue to hold a proxy on all 56.6 million USAi
Vivendi has been trying to sell VUE -- which includes cable networks USA
Network, Sci Fi Channel, NewsWorld International and Trio; Universal Studios;
Universal Music Group; and theme parks -- for months.
Possible suitors include Viacom Inc., Metro-Goldwyn-Mayer Inc., General
Electric Co.'s NBC unit, Liberty and former Vivendi vice chairman Edgar
Bronfman, who reportedly would team up with private investors and Cablevision
Texas oil billionaire Marvin Davis made an unsolicited bid for VUE in
November -- for $20 billion, including $5 billion in debt -- but that was
rejected by Vivendi as being too low. Davis is said to still be in the running