07/08/2003

French entertainment colossus, Vivendi Universal (VU), is set on selling off its US Vivendi Universal Entertainment (VUE) assets, even if the number of potential buyers continues to fall from one week to the next. Liberty Media appear to have followed in the footsteps of MGM and withdrawn their bid for some VUE American activities - namely Universal Studios, US Networks cable TV, and the VUE's theme parks.
VU would like to broker separate deals for Universal Music and the Videogames sector.

As we go to press, the list of interested parties includes Edgar Bronfman, NBC (a General Electric company) and Viacom. However both NBC and Viacom feel the asking price is still too high. The degree of financial involvement becomes very clear when one considers that VU turned down MGM’s bid of $11.5b.
Basically it’s a no win situation with VU refusing to supply potential buyers with access to its book-keeping. Although the colossus is in much better shape than this time last year when it was teetering on the verge of bankruptcy. VU is playing a waiting game and hoping the gamble pays off. They may decide to integrate the music and videogames assets into the main package and sell it all off as one single unit.
All decisions have been postponed until September when Vivendi Universal must sign off on the sale of VUE in order to honour a €13.5b debt. The French industry as a whole is waiting for this decision because a reinforced VU will restore confidence and create space for manoeuvres for a number of subsidiary companies like Gallic pay-TV, Canal +, the French film industry's main source of funding.

(Translated from French)