Liberty Media – the investment vehicle of US media mogul John Malone – is taking Vivendi Universal to court for allegedly misrepresenting its financial position.
Vivendi – which professed itself “stunned” at the news – is accused of hiding its imminent financial crisis when buying Liberty’s shares in USA Networks in December 2001.
That agreement saw Liberty swap part of its stake plus its holding in French TV group Multithématiques for a 3% interest in Vivendi.
Since then, the French-American media group has seen its shares lose over two-thirds of their value as it has struggled to cope with an Everest-like debt mountain.
Liberty, which is pursuing undisclosed damages plus the nullification of the deal, argues its contract with Vivendi included inaccurate assurances about the latter’s finances. “The financial situation at Vivendi was nothing close to the rosy situation that defendants had portrayed it to be,” said the suit.
However, Vivendi suspects the US group may have ulterior motives. Liberty is trying to buy two US cable channels from the French-American firm, prompting one Vivendi insider to dismiss the suit as “opportunistic and discourteous negotiating tactics.”
Data sourced from: multiple sources; additional content by WARC staff