The turmoil at Vivendi Universal increases by the hour as the Franco-American group’s board prepares to meet in Paris this morning (Wednesday).
The meeting is expected to give formal approval to the resignation of chairman/ceo Jean-Marie Messier – as well as his severance package, reportedly in the region of €18 million ($17.61m; £11.54m).
The payoff will enrage those shareholders who hold Messier’s overwheening ambition and hubris responsible for the group’s current agonies. Says French shareholder activist Colette Neuville: “It's not in the interest of the company to pay him even one euro. It's a scandal when you consider the amount of money shareholders have lost.”
Meantime, shares in Vivendi continued their freefall after reports Tuesday that it improperly attempted to add €1.51 billion in profits to its 2001 bottom line. Paris newspaper Le Monde alleged “opaque accounting” and charged that the group had tried to register the sale of a holding in UK satellite broadcaster BSkyB – a ploy subsequently disallowed by French financial regulators.
But the allegation wrought further havoc with Vivendi’s already battered stock price, which yesterday plummeted 38% to €14.6 on the Paris Bourse, automatically triggering suspension of dealings. Commented a London equity dealer to the Financial Times: “The value of the assets is falling by the minute. Management's a mess. People are giving up on it.”
Today’s board meeting will also address the matter of Messier’s successor. In the short term (six months) this is likely to be Jean-Rene Fourtou, vice chairman of the supervisory board of pharmaceuticals company Aventis.
Equally high on the agenda will be Tuesday night’s downgrading of Vivendi stock from Baa3 to Ba1 by Moody's Investors Service – effectively reducing it to junk status. The directors will also consider the possibility of even more draconian rating cuts from Standard & Poors unless it secures “several billion euros” of bank financing soon.
Meantime, Messier remained true to type: unbowed and unabashed. “I fashioned this group with my team. I love it passionately. But there is an undeniable truth: one doesn't head a company with a divided board,” he told Le Figaro yesterday. “My successors can only be French. I have agreed to step down because I am convinced they will be, because that is the will of the board.”
In another interview with leftwing daily Liberation, Messier vigorously denied charges that he was heavily indebted to the group: “I have not got any loans – not one euro, not one of any currency – from Vivendi Universal. I have not got any guarantees from Vivendi Universal.”
Data sourced from: Financial Times; MediaGuardian.co.uk; additional content by WARC staff