Vivendi Vice-Chair Bronfman Enters US Asset Auction

22 May 2003

A new bidder has emerged in the auction of Vivendi Universal’s US entertainment portfolio – Vivendi’s own vice-chairman Edgar Bronfman Junior.

Bronfman is certainly no stranger to the assets, which include Universal Pictures and Universal Music Group. As ceo of drinks giant Seagram he bought most of them in the 1990s before selling the firm to Vivendi in 2000.

Now he is putting together a group of investors to bring them back under his control. So far he has won the support of cable operator Cablevision Systems, which would add its own entertainment cable networks to the Vivendi assets to form a new company in which it would take a stake of up to 33%. Wachovia Securities and Merrill Lynch will provide debt financing, while private equity firms are being approached to provide the rest of the cash.

Although several media firms have declared an interest in the assets – the latest being Liberty Media [WAMN: 19-May-03] – Bronfman has a number of advantages. He is the only bidder to be interested in Universal Music, in which he intends to take a majority stake, and he is already on good terms with several of Vivendi’s leading US executives.

The sale is expected to bring in upwards of $15 billion (€12.8bn; £9.1bn). So great has been the decline in media fortunes in recent years that Bronfman will almost certainly be able to buy the assets back for less than he paid for them first time round.

Data sourced from: The Wall Street Journal Online; additional content by WARC staff