Vivendi Deal Could Prove Tres Cher

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London -- A potential bid for French utility and media
conglomerate Vivendi S.A. would come at a considerable price and involve paying a high
premium to investors, analysts said last week.

Analysts were commenting on European press reports that
News Corp.and British Telecommunications plc were considering a joint bid for the company
-- the largest shareholder in French direct-to-home platform Canal Plus and and the second
biggest stakeholder in its U.K. counterpart, British Sky Broadcasting Group plc. Vivendi
is also the world's largest water utility.

British Telecom and Vivendi declined comment on the
reports. News Corp. could not be reached for comment.

One analyst estimated Vivendi, with a market capitalization
of about $40 billion, would fetch $80 per share in a hostile takeover -- a bit higher than
the $76.4 per share at which it traded late Nov. 10. Shares of the utility have gone up
almost 20 percent in recent weeks.

The analyst also said that News Corp. and British Telecom
would probably only want about one quarter of Vivendi's assets.

According to reports, Vivendi's assets would be broken up,
with News Corp. taking its TV interests and British Telecom the company's telephony
operations, which include Cegetel, France's second-largest telephone company.

Vivendi owns 24.5 percent of BSkyB, while News Corp. owns
40 percent of the DTH provider.

While the specifics of any deal are still speculation, News
Corp. and Vivendi are collaborating on Internet and new-media projects with Japan's
Softbank Corp.

But up to now, News Corp. chairman Rupert Murdoch has ruled
out any talk of further cooperation, at least between Canal Plus and BSkyB -- something
favored by Vivendi CEO Jean-Marie Messier.

Vivendi has said it will sell 9 percent of Canal Plus. It
could effectively control the company with a 40 percent holding.

Companies reportedly interested in buying into Canal Plus
include MSO United Pan-Europe Communications N.V. (UPC) and software giant Microsoft
Corp., which also owns a stake in UPC.

Also said to be interested is Exante, a media-investment
partnership led by Callahan Associates International, itself a big investor in French and
Spanish cable operators.