Vivendi Not Hurrying a Bid
By John M. Higgins -- Broadcasting & Cable, 8/10/2003 8:00:00 PM
Usually buyers gear up for a bidding deadline and excitement builds. But in the sale of Vivendi Universal Entertainment, corporate suitors are going slow.
French parent Vivendi has asked for a second round of bids on its U.S. entertainment properties Aug. 18 (its initial deadline this Friday, one bidder noted, would have Vivendi's bankers working furiously over weekend; a Monday deadline will rob the buyers advisers of their weekend.)
But the pressure is off, in part relieved by Vivendi's expectation that the bidders should be willing the value VUE at $14 billion. "Nobody's excited about the $14 billion number," said an executive with one bidder.
Industry executives said that Liberty Media CEO John Malone has lost interest in the auction and may at best submit a lowball bid. Viacom is holding firm in its stance that it only wants VUE's cable networks, USA Network and Sci Fi Channel. Only an investor group led by former Seagram CEO Edgar Bronfman Jr. is showing much swagger in anticipation of the bidding
And despite weeks of talks, General Electric, on again, may not submit a formal bid. The industrial giant wants to merge VUE into its NBC unit without actually giving the French company any cash.
While Vivendi has been reviewing tons of financial information, GE advisers are telling the company it may need more time to finalize valuations of the joint venture. "They've been talking for a while, but GE's hasn't been getting all the numbers it wants until the last week or two," said one adviser to the company.
Comcast remains the wild card. The company has signed a confidentiality agreement to review the same financial information other bidders have gotten. They've tapped Frank Biondi—former president of Viacom and former chairman of Universal Studio—to help them process the financials. Comcast Cable President Steve Burke is cautioning investors that the company won't do anything crazy.
But an adviser to the company said CEO Brian Roberts is taking the process seriously. "It could be very interesting, especially if it's the kind of busted auction it seems to be turning into," the adviser said. Other bidders say he may cut a venture with Malone and his sidekick, Barry Diller, whose Interactive Corp. holds a stake in VUE and may incur a $1 billion tax penalty if the company is sold. Under the terms of a previous deal, Vivendi is on the hook pays to cover Diller's tax bite.
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