The sale of Vivendi Universal’s 55% stake in internet service provider AOL France back to US internet colossus America Online has finally been agreed.
The deal, a regulatory requirement for Vivendi in the run-up to the launch of Vizzavi (its online joint venture with UK-headquartered Vodafone Group), was announced earlier this month [WAMN: 06-Mar-01]. However, the finalised details have only now been disclosed.
In return for the stake, Vivendi will receive $725m, payable in junior preferred shares in the online giant’s European arm AOL Europe. These shares will be redeemed by the latter in April 2003, either for cash, AOL Europe common stock (if the company has gone public), or for a holding in parent group AOL Time Warner.
Vivendi, which has agreed not to set up a rival ISP in France for three months after completion of the deal, stands to make a considerable profit from the agreement, having originally bought the stake for only $150m. It stated that the proceeds would be ploughed into its affiliate SFR’s bid for the French third-generation wireless licence.
AOL Europe, in which AOL holds a 50% stake, has not revealed the level of holding Vivendi will receive for its $725m. However, preferred shares have no management or voting rights attached.
In addition to the financial terms, the agreement also covers marketing and distribution arrangements. Vivendi has, claims AOL, promised to plough $25m over the next twelve months into online advertising via AOL Time Warner. Meanwhile, Vivendi-owned pay-TV company Canal Plus has reportedly forged a cross-marketing pact with AOL France, whose mobile portal will in turn be promoted and distributed by SFR.
Significantly, Vivendi was in less garrulous mood and refused to confirm AOL’s claims, which it stated were not necessarily accurate.
News source: Wall Street Journal