Revenue: $24.5 billion*
Profits: $1.8 billion*
Giant French conglom Vivendi Universal discarded its controversial CEO Jean-Marie Messier in July along with his visions of worldwide media domination. New topper Jean-Rene Fourtou is focused on selling assets and hashing out credit facilities with French banks to pull the company through a severe cash crunch after a string of costly acquisitions.
But investors weren’t reassured by Fourtou’s first appearance, via conference call from Paris, on Aug. 14. That day Vivendi posted heavy losses for the second quarter and first half of the year, a $10 billion charge to write down the value of various assets, including Universal Music and USA Networks.
Fourtou said Vivendi still hadn’t formalized a S3 billion ($2.95 billion) credit facility but announced plans to divest assets, including Houghton Mifflin and Vivendi’s stake in EchoStar. He was keeping mum on the future of the the U.S. entertainment holdings, which are likely to be put up for sale. Viv U will choose a corporate strategy at a board meeting Sept. 25.
Vivendi shares, already floundering, were hammered for three days running after the earnings report. The stock has fallen more than 80% over the past year.
Fourtou already has announced plans to sell off pieces of Canal Plus — mainly the loss-making foreign operations — and Canal Plus Technologies.
Vivendi Universal will keep French pay TV arm Canal Plus and satcaster CanalSatellite.
It also will retain its 21% stake in Spanish pay operator Sogecable, production arm Studio Canal and niche-channels bouquet Multithematiques.
Viv U is still bifurcated; it’s the largest shareholder in water utility and waste management company Vivendi Environment.
The once-dynamic Messier made a splash as he jumped headlong into showbiz, buying U parent Seagram two years ago. Then he just kept spending — snatching up Boston publisher Houghton Mifflin, taking a $1.5 billion stake in satcaster EchoStar and buying Barry Diller’s USA Networks in a deal worth more than $10 billion.
The conglom’s financial position deteriorated along with financial markets and the broader economy. The synergies Messier touted never materialized.
Messier alienated power elites further when he sacked longtime Canal Plus chief Pierre Lescure in the spring. That was soon after the company posted the biggest loss in French corporate history to a one-time charge of nearly $14 billion.
*media and communications group