Vivendi Universal Expects Six Offers For Media Assets6/22/2003 08:00:00 PM Eastern
After months of mating dances with a variety of media moguls, Vivendi Universal expects to get down to business this week with the auction of its U.S. entertainment assets, which include cable's USA and Sci Fi channels, the USA Studios production division, and Universal Studios itself.
|The $20B Prize|
|Viacom, NBC, Liberty, Edgar Bronfman Jr., Marvin Davis and MGM are eyeing all or some of VUE. Here's what the pieces are worth.|
|Source: Morgan Stanley|
|Sci Fi Net||$1.1|
Six players are expected to submit offers this week: Liberty Media, Viacom, General Electric's NBC, minor studio MGM, and two investment groups.
One group is led by Vivendi Vice Chairman Edgar Bronfman Jr., who sold his family's Seagram Corp. to Vivendi only to watch it plunge into a financial morass; the other teams billionaire oilman Marvin Davis, who once owned 20th Century Fox, with former Seagram CFO Brian Mulligan.
The bids are likely to be all over the map, with most would-be buyers picking and choosing among Vivendi's media units. Industry executives said that only two bidders—Bronfman and Davis—are willing to swallow all six of Vivendi's domestic units.
But entertainment assets are rare enough commodities that players may stretch to get them. For example, NBC CEO Bob Wright has for years said that, unlike its broadcast brethren, the network doesn't need to be married to a movie studio. Nevertheless, he is expected make an offer for all of VUE's TV and movie assets.
NBC declined to comment. But one source familiar with the company's strategy said that NBC plans to submit a bid for the cable networks, the TV production arm and the movie studio, but added, "I don't think you're going to see an overly aggressive bid from GE."
Viacom, whose President Mel Karmazin has said he wants to own only Sci Fi Channel, is likely to bid for USA Network and has expressed willingness to buy Universal Studio.
Liberty is widely seen as the strongest suitor. At its shareholder meeting in Denver last week, CEO John Malone bragged that Liberty is armed with $6 billion in cash and more than $10 billion of other liquid investments.
Bronfman has the backing of Cablevision Systems Chairman Charles Dolan, who has pledged to contribute his networks into the pool. But the biggest of those assets—AMC Networks—was rocked by a financial scandal last week (see story, page 3).
But, as the suitors go down to the wire, Vivendi executives are pushing hard to eliminate any impression that the French company will settle for fire-sale prices on any of the units, declaring for the first time last week that, with the rebound in the stock market, Vivendi could raise money by selling 25%-30% of Vivendi Universal Entertainment to the public and continue to run it.
Whether Vivendi sells it all or instead sells a portion through a public offering, it would be a stark turnabout for Chairman René Fourtou, who is succeeding in his mission to salvage Vivendi from the financial chaos left behind by ousted CEO Jean Marie Messier last year. Fourtou has complained that the Hollywood assets are too difficult to manage from Paris.