Conglom declines offer from Kohlberg Kravis

Vivendi said Sunday that it had received a “friendly” takeover approach from private equity group Kohlberg Kravis Roberts that included a plan not to break up the business, but after a review of the offer, the company declined to proceed with sales talks.

Neither Vivendi nor KKR would say how much the offer entailed, but over the weekend, French newspaper Le Monde pegged the amount at E40 billion bid ($50.8 billion), the New York Times at $50 billion. In either case, leveraged buyout offer is the largest in history, eclipsing by far KKR’s current record bid of $33 billion for hospital operator HCA. Stockholders in HCA are scheduled to vote on that offer Nov. 16.

Vivendi’s market capitalization is $44.5 billion based on Friday’s closing stock price.

The New York Times report said that talks between Vivendi and KKR, which were initiated by Vivendi, had been going on for about a month. The Financial Times reported that the offer failed partly over tax issues.

Shares of Vivendi have gained 15% this year, outperforming the 13% rise in the Euronext Paris CAC Consumer Services Index, in which it has the biggest weighting.

Vivendi in May rejected a plan from Norwegian investor Alexander Vik to break up the company. Splitting up Vivendi would increase the value of its parts and may attract a buyout offer, according to Vik’s investment company, Sebastian Holdings.

With about 25% of the $33 billion global music market, Vivendi’s Universal Music Group is the world’s largest record company. Vivendi asked European regulators last week to approve its $2.07 billion bid for Bertelsmann’s BMG music-publishing division.

Company also owns French mobile-phone service provider SFR, the group’s largest unit by sales and profit contribution, as well as pay channel Canal Plus and a 20% stake in NBC Universal.

Vivendi in July sold its remaining stake in Veolia Environnement, severing ties with the water utility from which it was created.

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