Skip to main content

Vivendi Ponders VUE IPO

Vivendi Universal chief financial officer Jacques Espinasse said the French
conglomerate would consider an initial public offering for its U.S.
entertainment assets, just days before it is expected to begin fielding initial
bids for those properties.

Vivendi has said in the past that an IPO was a possibility, but the declining
stock market made it highly unlikely. But as the markets have rebounded in the
past few months, Espinasse said a Vivendi Universal Entertainment IPO has
re-emerged as an option.

"Given the return of the capital markets both in New York and Paris, we are
also seriously considering as an alternative solution an IPO," Espinasse said on
the call. "We do feel that it is a realistic solution. It is not a fall-back
solution -- it is an alternative solution depending on the level of offers we
will get."

Vivendi has had its U.S. assets -- VUE, consisting of cable channels USA
Network, Sci Fi Channel, NewsWorld International and Trio; Universal Studios;
and Universal Theme Parks -- on the block for months.

At least six companies have expressed some interest in submitting bids for
all or part of VUE -- Liberty Media Corp., General Electric Co.'s NBC television
network, Viacom Inc., former Vivendi vice chairman Edgar Bronfman Jr. (expected
to team up with Cablevision Systems Corp. and several private-equity firms),
Metro-Goldwyn-Mayer Inc. and Texas oil billionaire Marvin Davis.

So far, only Davis has submitted a bid -- $20 billion -- that was rejected by
Vivendi in November as being too low. However, published reports said Liberty
met with VUE officials last weekend and the initial rounds of bids were expected
June 23.

Espinasse didn't give an exact date, but he said the company expects to have
bids soon.

"There are a multiplicity of buyers that have expressed interest," Espinasse
said. "We are getting close to collecting the copies of each one of the

But Espinasse made it clear that Vivendi will not be forced to sell VUE for
an unattractive price.

"We are not in a corner," Espinasse said. "The process is clearly monitored,
controlled and run by [Vivendi]."

VUE's operating income was down 23% in the first quarter -- to $250 million
from $325 million -- which could cause some bidders to reduce their