Viv U offloads Vizzavi stake

Brit telco Vodafone pays $141 mil

PARIS — Vivendi Universal Friday confirmed the sale of its 50% stake in money-guzzling Internet portal Vizzavi and its consumer press biz, including top news weekly L’Express, in deals worth $440 million ($434 million).

British phone company Vodafone will pay $141 million for Viv U’s half of Vizzavi. Vivendi will save another $168 million it was slated to invest in Vizzavi this year.

The Socpresse group, owner of French newspaper Le Figaro, will fork over about $294 million for Express and Viv U’s Comareg free-press unit. That’s said to be a lowball — but not a fire sale — pricetag.

Two U.S. private equity groups, Blackstone and Thomas H. Lee, are said to have emerged as lead bidders in the auction of educational publisher Houghton Mifflin, which Viv U said it plans to divest.

The sales mark the end of a disastrous venture with Vodafone and the beginning of Viv U chairman Jean-Rene Fourtou’s $9.8 billion asset dis-posal program.

Vizzavi was the linchpin in ousted Viv U topper Jean-Marie Messier’s vision of a glittering media company held together by a service that deliv-ered its own music, video and games through Internet and mobile phone services. To date, however, Vizzavi has cost the company over $1 billion.

While they applaud the sales, investors remain confused by the com-pany’s ultimate intentions.

In early August, Fourtou said that, Houghton Mifflin aside, the com-pany would not sell any of its publishing assets. A Viv U spokesman maintained that the wording of Fourtou’s statement only meant that the company would not sell any other publishing houses, but analysts see this about-face as another example of the company’s poor communications.

“Right now investors aren’t putting any weight in statements made by Vivendi that aren’t backed up by action,” said Mark Harrington, a media analyst with JPMorgan. He said the inconsistency indicates lack of a firm strategic direction.

Before Viv U announced its plans for asset sales (on Aug. 14), Fourtou had rigorously denied that the company was planning to sell the education publisher.

Offers for Houghton

Viv U has received offers for the Boston-based publisher from several private equity groups, including a joint bid by Blackstone and Thomas H. Lee — which made a run at Houghton Mifflin before it was sold to Vivendi.

Blackstone, which has other investments in education, “would be natural buyers for Houghton Mifflin,” Harrington said. He suggested a private equity firm could take the company public again or resell it to a buyer like Lagardere, which owns Hachette Filipacchi.

The publishing and Vizzavi sales barely make a dent in the company’s $19 billion debt, or its $9.8 billion target for its two-year auction. It remains to be seen whether the sale of Houghton Mifflin, which Viv U bought for $2.2 billion, will make a profit for the ailing media giant as promised.

Viv U has maintained that it will be sold at a profit, but analysts remain skeptical.

Meeting on U’s fate

Speculation has been rife that the company will either sell or spin off its U.S. entertainment assets.

Fourtou is said to be meeting Universal Music Group topper Doug Morris, Vivendi Universal Entertainment chairman Barry Diller and top executives from Universal Studios on Sept. 12 and 13 to discuss the fate of U’s movie studio, theme parks and music group.

That those put in place after the ousting of Messier, and Fourtou’s sub-sequent nominations, have no experience whatsoever in the entertainment business has suggested to some that Viv U intends to dump its American media holdings.

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