Vivendi Split-Up Rumors Renewed


Speculation that Vivendi Universal S.A., the French utilities and entertainment giant, would spin off into two parts heated up again last week, after reports in French newspapers pointed to dissention among some of the company's top shareholders.

According to French newspaper Liberation, several board members, tired of Vivendi's declining stock price, were backing a plan that would separate the company's media assets — including Universal Studios and Vivendi Universal Entertainment, a partnership that includes the cable channels USA Network and Sci Fi Channel — from the company's Cegetel telephone unit and its Vivendi Environment water utility.

Those reports came on the heels of another French newspaper article that said former Seagram Ltd. chairman Edgar Bronfman — who owns about 61 million shares, or 6 percent, of Vivendi stock — was talking to French takeover artist Vincent Bollore about a possible hostile bid for Vivendi. Bollore recently began acquiring Vivendi stock, according to press reports.

And last Wednesday, French newspaper La Tribune
reported that Claude Bebear, chairman of AXA Financial and a major Vivendi stockholder, blasted company management citing a "decision-making problem in the company".


The most recent controversy could make Vivendi's planned May 29 shareholder meeting in New York an interesting one.

Vivendi spokeswoman Anita Larsen declined to comment. "It is rumor and speculation, and we don't comment on rumor and speculation," she said.

Bronfman received his stake in Vivendi after selling Seagram's Universal Studios business — including its 46 percent stake in USA Networks Inc. — to Vivendi in late 2000, for $30 billion in stock. Bronfman's cut, worth $4 billion at the time the deal closed, is worth just $1.8 billion today.

News of possible changes to Vivendi Universal's structure caused the stock to rise slightly on May 21. It closed at $30.15, up 60 cents. But it lost ground the next day, closing at $29.60.