Vivendi Universal of France and America’s General Electric Company are closeted in intensive dialog aimed at merging the former’s US film and TV assets with the latter’s broadcast TV giant NBC. It is hoped that a deal can be thrashed out before Vivendi’s board meets in Paris next Tuesday.
According to the Wall Street Journal, the two sides are moving toward a recommendation to enter into exclusive negotiations to merge the businesses. But, insiders caution, a deal is far from done despite the fervid atmosphere. Other bidders have yet to be ruled out, not least the group led by Canadian entrepreneur Edgar Bronfman Junior, currently vice-chairman and director of Vivendi.
A merger of NBC with Vivendi's stateside businesses has long been a strategic dream of Vivendi chairman/ceo Jean-Rene Fourtou. Such a marriage would create a substantial new entertainment company, boasting assets such as the NBC broadcast network, Universal Studios and cable channels CNBC, USA and Sci Fi.
Such a hybrid would be controlled by GE but minority-owned by Vivendi and – better yet from the latter’s viewpoint – as the deal would not involve cash or publicly traded stock, Vivendi could value its stake in the joint venture at around the $14 billion mark – the sum it sought for its US entertainment assets from day one.
In short, a deal that even deposed Vivendi chairman Jean-Marie Messier might applaud!
• Meantime, speaking of the departed, more news of the €20.5 million ($23.04m; £14.42m) golden parachute claimed by the Czar of Chutzpah. It seems that Messier must wait for another ninety days to learn whether or not he can lay hands on the moolah, currently withheld by Vivendi.
The 90-day stay of payment was made by a New York court which had earlier approved Messier's severance package, granted without board authorization by Vivendi’s [then] chief operating officer, Eric Licoys. The payment is opposed by Vivendi which seeks damages both from Messier and Licoys – as a result of which the payout was frozen last week by a French court [WAMN: 13-Aug-03] and this week in New York.
Data sourced from: The Wall Street Journal Online and mad.co.uk; additional content by WARC staff