PARIS — Shares in beleaguered Gallic conglom Vivendi Universal rose Tuesday after claims that board members are considering spinning off its media assets.
According to local press reports, Viv U would put its mostly American assets — including Universal Studios, Universal Music and USA Networks — as well as French subsid Canal Plus into a new entity, separate from water utility Vivendi Environnement and profitable telco Cegetel.
Viv U shareholders would get shares in both new companies, though U.S. shareholders would be expected to gradually disengage from the French utilities side in favor of the media business. In that case Canal Plus could be sold off, possibly to Gallic conglom Lagardere or to French raider and Viv U shareholder Vincent Bollore, who would like to break into the entertainment arena.
Viv U declined to comment on the rumors but confirmed that its board will meet May 29 in New York.
Plan would avoid political problems
The plan would likely help conglom avoid the political brouhaha that would arise if the assets were sold outright. In the past two months, politicians including Prime Minister Jacques Chirac and his predecessor Lionel Jospin have threatened any deal in which either company is majority owned by foreign interests.
Canal Plus, for example, can not be more than 20% owned by non-French shareholders.
Viv U is shouldering a 20 billion euro ($18.4 million) debt and has watched its shares tumble almost 50% since the beginning of the year, threatening the company and its head, Jean-Marie Messier.
The stock has slipped more than 70% since Messier forged the merger with Seagram in 2000, turning the utilities company into the world’s second largest media conglom.
Viv U’s U.S.-listed shares rose 2% to $30.15 on Tuesday.
(Reuters contributed to this report.)