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Davis set to renew U woo

Billionaire to meet with Fourtou over offer

NEW YORK — Marvin Davis and the consortium bidding for Universal plan to renew their pitch to Vivendi in Paris in late January as the effort gathers steam despite skepticism on Wall Street and in Hollywood.

The parties are looking at two dates next month for Davis, former owner of 20th Century Fox, to meet with Viv U chairman-CEO Jean-Rene Fourtou. Neither Davis nor Fourtou attended the first meeting in Paris earlier this fall in which Davis reps offered about $20 billion for all of U’s U.S. entertainment assets, including Universal Studios and Universal Music.

Davis has Bain Capital and Texas Pacific as potential backers, and at least one other big financial partner is said to have joined the group. Deutschebank is said to be on board, and the partners are talking with several other European investment banks.

Davis publicly announced his run for U on Nov. 21, putting the assets firmly in play after Fourtou had waffled repeatedly on his plans for the U.S. entertainment biz.

Analysts and industry players immediately brought up Davis’ reputation as a “tire kicker” who had considered buying various media and showbiz properties in the past but usually opted to hang on to his cash. Some figured Davis’ press release was an attempt to pressure Vivendi after the offer had been rejected, and many doubted the financing was in place.

But people close to the bid stress that in this deal, the billionaire former oilman is only one of a group of investors, although his name is the best known.

And they claim the hefty pricetag can be brought down to a manageable level through the sale of noncore assets and, possibly, by monetizing the giant Universal lot by selling it to a financial investor and leasing it back. There are also ways to extract cash from the theme park biz without selling it.

Critics “see Davis’ name and $20 billion and say, ‘Oh yeah, sure,’ ” one person speculated, “but that’s not the right way to look at it.”

Plenty of hurdles

However, the purchase could face significant obstacles.

Universal owns a few noncore assets like Spencer Gifts, but beyond that it’s not clear how much is left to sell.

John Malone’s Liberty Media has said it’s interested in pursuing Vivendi, and other suitors could emerge. They need to have deep pockets since Vivendi Universal Entertainment, which includes film, TV and theme parks, needs to be sold in one piece or it would generate a huge tax bill. Only music could be sold separately.

Barry Diller, the head of Vivendi Universal Entertainment, still hasn’t made clear his intentions regarding his future role at U — but if he decides for any reason to fight the Davis bid, he’s a force to be reckoned with and said to be close to Fourtou.

Financing can fall through. The partners may not like what they find when they examine U’s numbers — if they get that far into the process.

And Vivendi, which has shown no shame in strategic flip-flopping, may decide to keep Universal after all.

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