Vivendi 'hid financial crisis'
NEW YORK (Reuters) -- Vivendi Universal on Sunday described a lawsuit by Liberty Media Corp. as "without merit" and said it saw the litigation as an effort to gain leverage in negotiations between the companies.
French conglomerate Vivendi said the lawsuit, filed on Friday by Liberty, which is controlled by media mogul John Malone, came a day after Vivendi conducted a business meeting through its bankers with Liberty's chief executive.
Vivendi said it believed Liberty's chief motive in filing the suit was to gain leverage in ongoing negotiations about future collaborations between the companies. It said it would vigorously defend itself against the lawsuit.
Liberty, which has publicly said it was interested in buying Vivendi assets, alleged that Vivendi hid its financial crisis while it negotiated a 2001 deal to exchange its shares for Liberty's stake in USA Networks.
Vivendi also said the lawsuit would not distract it from resolving its financial issues and that it remains on track to return to an investment grade credit profile within the next 12 to 18 months by continuing to reduce its debt.
The ailing media company, which posted the biggest loss in French corporate history earlier this month, restructured its debt and raised $3.72 billion in additional money last week.
Vivendi shares closed down 18 cents at $14.25 on the New York Stock Exchange on Friday. Liberty stock finished down 17 cents at $9.79, also on the NYSE.
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