Street’s French dip

Despite hype, trading weak for Vivendi shares

Shares of Vivendi dipped in thin trading Tuesday as U.S. investors shrugged off the French conglom’s first day on the New York Stock Exchange.

Vivendi did what it could to tout its new U.S. listing, with full-page newspaper ads and regular promos on CNBC plus a free George Benson concert, T-shirts and hats outside the stock exchange. Vivendi, which is in the process of merging with Seagram Co., also put a Jumbotron down on Wall Street with a continuous feed explaining who and what it is.

“Establishing a presence in the U.S. capital markets is vital to our global expansion strategy,” said Vivendi CEO Jean-Marie Messier. He said the new U.S funds will make it easier for Vivendi to grow Stateside.

U.S. investors weren’t impressed. American depository receipts (the units of foreign companies that are traded on U.S. exchanges) opened at $16.12 and closed down slightly at $15.94, with only 586,000 ADRs trading hands.

“The objective of the listing is to raise the presence of the company in the U.S. investment community. That hasn’t happened yet,” said a person close to Vivendi.

Several Wall Streeters noted that the French media and environmental services company hadn’t communicated particularly well with the Street when the merger with Universal Studios’ parent Seagram was announced in June. They said many investors are still not clear about Vivendi’s businesses or its strategic plans.

The combination also includes Vivendi’s giant pay TV unit Canal Plus.

Meanwhile, French investors, quite familiar with Vivendi, bid the stock lower after the $34 billion deal was announced. Investors on both sides of the Atlantic are dubious about a foreign company taking over a U.S. film studio. “It’s a tricky space,” noted one fund manager.

Vivendi has been touting Seagram’s Universal Music Group, the world’s largest music company, as the plum asset in the deal and anticipating lucrative synergies with Vivendi’s new digital, multi-access Internet portal, Vizzavi.

Seagram CEO Edgar Bronfman Jr. said recently the merger is on track to close in November. He and Messier will host a major investment conference later this year to talk about the deal and hope U.S. markets will warm up to it as they learn more.

Seagram shares nosed higher by 0.3% to close at $59.25.

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