Diller still lurks in NBC U labyrinth

IAC topper sells personal stake in conglom

Barry Diller was safely “on the road” Wednesday when NBC officially took over Vivendi Universal Entertainment in a blaze of Peacock glory, but the InterActiveCorp chief is certainly not far from the minds of either company.

Vivendi disclosed Thursday that Diller sold his personal 1.5% stake in VUE back to the Gallic firm, as previously agreed, for the princely sum of $275 million. Sale price — guaranteed in a 2002 contract — values VUE at $18 billion, significantly higher than the $14.2 billion implied by the NBC deal. The shares will be transferred back to the new NBC Universal partnership.

Still, Diller is apparently holding the line to get top dollar compensation on IAC’s vested interests in the Universal properties and chose to keep intact InterActiveCorp’s 5.4% equity stake in the old Vivendi Universal Entertainment entity. Diller opted against swapping that stake for a much smaller holding in parent company NBC Universal. As a result NBC U winds up owning 80% of only 94.6% in VUE — which technically comprises the Universal film and TV assets now consolidated within the new entity.

That means NBC and Vivendi may have to continue negotiating if they want to simplify the company’s ownership structure and/or eject Diller from having any influence over company decisionmaking. Sources say the NBC U shareholders have discussed offering IAC a “tip” of $100 million-$200 million in an effort to coax him into exiting the partnership.

Also still to be determined is the legal fate of two vexing tax disputes. Diller claims Vivendi owes some $620 million based on the value of certain preferred shares in VUE. Diller also maintains that Vivendi is liable for some $500 million-$1 billion in capital gains taxes if and when NBC Universal buys out the minority stake.

In a conference call with investors Thursday, Vivendi chief operating officer Jean Bernard Levy said he expected the tax liability to be resolved but couldn’t say how long it will take. “We’ve not provided for it in the balance sheet as we think it has no merit,” he added.

‘There are still a lot of unanswered questions,” said one U.K.-based analyst. “This was a hugely complex transaction, and it’s still not entirely clear how it will all shake out.”

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