Deadline looms for Vivendi auction
 |
Fourtou launched the assets sale to reduce Vivendi's mountain of debt.
Story Tools
|
LONDON, England (CNN) -- Shares in Vivendi Universal, the world's second-largest media company, declined Monday as a bidding deadline loomed for the group's U.S. entertainment assets.
Paris-based Vivendi is looking to raise more than $10 billion through the sales of some of Hollywood's top names -- including Universal Studios, Universal Music and the USA and Sci-Fi cable channels -- to slash its debt mountain.
At least six bids are expected by Monday's deadline. The sale of the U.S. assets is expected to completed in July.
The potential buyers are believed to be a group led by Edgar Bronfman Jr. -- the former head of Seagram, which originally sold the assets to Vivendi -- as well as an investment team led by U.S. billionaire Marvin Davis, Colorado-based Liberty Media, the NBC television network -- owned by General Electric -- and media giant Viacom Inc.
Vivendi (PEX) shares were down 1.4 percent at 16.47 euros in midday trading Monday in Paris.
Jean-Rene Fourtou, chief executive of Vivendi, announced the U.S. assets sale as part of a wide-ranging debt-reduction program launched after he took over from Jean-Marie Messier last July.
Vivendi's net debt stood at 14 billion euros as of May 31, down from 15.3 billion euros at end of March, due mainly to the debt-cutting plan -- which has seen the company auction off much of its unwanted businesses.
Bronfman is leading a group of investors to buy back Vivendi's entertainment assets.
|
|
Messier was credited with transforming the water company into an entertainment giant to rival AOL Time Warner (AOL), the parent of CNN. But he was criticized for building up a mountain of debt and driving down Vivendi's share price during a two-year buying spree.
Last week, the company posted a first-quarter loss of 319 million euros ($380 million), compared with 815 million euros in the same period a year ago. Vivendi said its net loss fell to 56 million euros from 182 million euros. (Full story)
Analysts say Vivendi must continue to cut its debt in order to restore confidence among investors.
"I think the ideal for Vivendi Universal would be a fairly quick sale, obviously at good value and preferable in cash rather than on some share basis," Nigel Hawkins, a London-based independent media analysts, told CNN.
"Now, that is easier said than done. At the end of the day we are now down to six runners and riders all with some advantages, all with some disadvantages."
