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Viv telco deal is put on hold

Magistrates extend deadline by one month

NEW YORK — Vivendi Universal won some breathing room from French judges Monday as it explores a buyout of French telecom company Cegetel.

Magistrates extended a November deadline for Viv U to counter Vodafone’s proposed purchase of Cegetel by one month — meaning the French media conglom has more time to line up bank financing and check out suitors for its Houghton Mifflin publishing biz.

Magistrates at the Paris Commercial Court upheld Viv U’s claim that Vodafone violated terms of a shareholder pact when it tried to buy Cegetel earlier this month. Vodafone said then that Vivendi had only until Nov. 10 to come up with its own bid. The new date set by the court is Dec. 10. Viv U will still have to scramble to come up with at least $4 billion to acquire BT Group’s stake in Cegetel, which is owned jointly by Viv U, Vodafone, BT and SBC Communications.

Vodafone made offers to all of Cegetel’s other shareholders, including a $6 billion-plus bid for Viv U’s 44% stake.

Buying BT’s 26% stake of Cegetel is the easiest way for Vivendi to gain control of the phone company, which Viv U management under chairman-CEO Jean-Rene Fourtou has come to see as a core asset.

One pub suitor

The $1.75 billion pricetag Viv U is seeking for Boston-publisher Houghton Mifflin would go a long way toward raising the needed cash. Vivendi initially gave bidders until last Friday to submit formal offers at least that high, but none emerged. Viv U is talking with one potential acquirer, U.S. investment firm Blackstone Group. The extra month leaves time for new bidders to emerge. Vivendi has also considered splitting Houghton into pieces to sell it to avoid antitrust issues.

Viv U’s board was meeting late Monday to discuss the Houghton Mifflin sale and other issues. The company is perpetually toying with the possibility of selling or otherwise monetizing more of its holding in Vivendi Environment.

A move to buy Cegetel is a controversial one for cash-strapped Viv U. It would mean turning down billions of dollars from Vodafone and likely taking on additional debt. But Viv U is faced with strategic as well as financial decisions and feels it would be a stronger, cohesive company with Cegetel at its French core.

Vivendi said Monday it would seek a full judicial review of the entire Cegetel shareholder pact. The arcane agreement would allow Vivendi to match Vodafone’s $4 billion bid for BT’s Cegetel stake — or offer SBC a 13% premium to Vodafone’s $2.3 billion offer.

Vivendi shares rose 6.4% in Paris to close at l13.40 ($13.18). In New York, they rose 4.09% to $12.09.