It is rare that Rupert Murdoch sits at the poker table with a player of equally steely calibre. Jean-Marie Messier, Vivendi Universal chief executive, is such an opponent.
Messier has for some time been eager to dispose of Vivendi’s 23% stake in BSkyB, the satellite broadcaster controlled by Murdoch’s News Corporation. However, the French tycoon’s preferred route is to swap this for a strategic asset - for example Newscorp's minority shareholding in USA Networks owned by the cable tycoon John Malone.
But negotiations to this end have stalled and Messier now needs to accelerate the disposal of Vivendi’s holding - as demanded by the European Commission following the group’s $34bn takeover of Seagram Universal last year.
The release onto the open market of such a large block of shares would hit BSkyB’s stock price - an effect equally unwelcome to both sides - and Messier would prefer a private sale to institutional investors. Such a move would force a revamp of BSkyB's board and a dilution of Murdoch's control.
Vivendi’s stake entitles it to one seat on the BSkyB board. But if this were added to those held by existing institutional shareholders they could force through other boardroom changes, snatching control from Murdoch who would be relegated to minority shareholder status with 37% of the company.
The poker game continues.
News source: Financial Times