Vivendi-NBC Courtship Continues
Shares of Vivendi Universal rose Tuesday amid speculation that the French media and utilities company was near a deal to engage in exclusive talks about merging its U.S. entertainment business with General Electric Co.'s NBC division.
Vivendi's board was meeting in Paris Tuesday to weigh bids from two final suitors — NBC and a group led by investor Edgar J. Bronfman Jr. — officials familiar with the talks said on condition of anonymity.
Published reports indicated that NBC has an edge in the long-running auction for the Vivendi Universal Entertainment properties, which include the Universal film and TV studios, the USA and Sci Fi cable TV networks and theme parks.
NBC owns the NBC broadcast network and the MSNBC and CNBC cable channels.
The Wall Street Journal said in Tuesday's editions that Vivendi was expected to sign a nonbinding letter of intent to negotiate exclusively with NBC on a deal for a limited period. If a deal cannot be reached, the story said both sides could walk away.
Vivendi would get a stake in the combined media and entertainment business that it could sell if it wanted to raise cash.
The Journal said that Vivendi-NBC scenario presumes that the Bronfman group does not make a last-minute improvement in its offer.
Bronfman, who once controlled the Universal properties as chief executive of Seagram Co., spent the weekend in a last-ditch lobbying effort to salvage his bid, a source familiar with the matter said on condition of anonymity.
Calls were made Tuesday to two Vivendi spokesmen, but a secretary who answered the telephone said they were not immediately available to comment. NBC and Bronfman representatives declined to comment Monday.
Vivendi has been hoping to fetch $14 billion for the Universal assets to pay down huge debts run up during a buyout spree under former chief executive Jean-Marie Messier.
After a board meeting in Paris last week, Vivendi said an eventual agreement with either NBC or the Bronfman group would leave the French company with a "substantial" stake in a U.S. media group. It also said it would explore a public offering for the entertainment assets.
Some of the biggest titans of the U.S. media world expressed in Vivendi's entertainment arm during the monthslong bidding process, including cable TV mogul John Malone of Liberty Media Corp., CBS and MTV parent Viacom Inc. and Metro-Goldwyn-Mayer Inc.
Both MGM and Malone said they were dropping out of the bidding process because they felt the price was too high. Viacom had expressed interest only in the cable channels, and was effectively left out of the final round of bidding when Vivendi said it would continue talks only with NBC and Bronfman's group.
The Bronfman-led group includes Thomas H. Lee Partners, a private equity fund, and Cablevision Systems Corp., a cable TV company in New York that owns AMC, the Independent Film Channel and WE: Women's Entertainment channels.