Oil Magnate to Relieve Vivendi of US Entertainment Assets?

22 November 2002

Vivendi Universal is said to be mulling an offer from oil billionaire Marvin Davis of around $15 billion (€14.9bn; £9.5m) plus $5bn of debt for its US entertainment portfolio.

Davis (77), who owned 20th Century Fox in the 1980s, is reportedly assembling a group of investors to help finance the opportunistic bid. The assets include Universal Studios, Universal Music, Universal theme parks and the USA cable networks. He is interested in buying them outright or failing that a majority stake.

Although selling the entertainment units is not thought to be an option favoured by Vivendi boss Jean-René Fourtou, the cash-hungry media mammoth is taking the bid seriously and has held preliminary discussions with Davis in recent weeks.

The oil baron is said to have approached private equity firms Texas Pacific Group and Bain Capital plus a number of banks to fund the bid.

Vivendi had been expected to spin off the entertainment assets into a separate company to be headed by Barry Diller, currently in charge of the businesses under an informal structure [WAMN: 15-Nov-02].

Indeed, Davis’s plan may run into stiff opposition from Diller, who is not thought to feature in the billionaire’s plans for the assets.

A done deal evidently remains far off, not least because the price on the table is said to be well below what Vivendi management believes the units to be worth.

STOP PRESS (Fri 22-Nov-02, 0833 GMT)
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Vivendi Universal rebuffed Davis’s offer late Thursday, saying “a sale of the entertainment assets is not on the agenda”. But according to insiders, the Franco-US media giant has not ruled out a later bid from Davis and his private equity consortium – in competition with other known suitors.

Data sourced from: multiple sources; additional content by WARC staff