NEW YORK — Vivendi Universal is considering an initial public offering of Vivendi Universal Entertainment as a “fallback” if it doesn’t like the bids that come in later this month for its U.S. showbiz assets, chief financial officer Jacques Espinasse said Tuesday.
As potential buyers study VUE’s books, Espinasse clearly wants to fan the flames, reminding investors that Viv U turned down a $7 billion check from Vodafone last fall for its stake in Cegetel because that wasn’t enough money.
Instead, the French conglom paid $4 billion to boost its own Cegetel holding — a “complicated” decision “we haven’t regretted for a single day,” he said.
Espinasse was speaking at a Deutsche Bank media conference in Gotham. It’s the first time a Viv U exec has hit the U.S. conference circuit since former CEO Jean-Marie Messier, as the company seeks to sell Wall Street on its newly minted strategy. Execs are also giving presentations in London and Paris.
Espinasse said that by next year, Viv U will be a big telco alongside a renewed Canal Plus. He expects Viv will also retain all or part of Universal Music.
Bids up in air
It’s not clear what that portends for bids by Marvin Davis and Edgar Bronfman Jr., both of whom want to buy all the U.S. entertainment assets, including music.
Espinasse dismissed reports of potentially huge tax liabilities attached to a sale.
Viv U would owe Barry Diller that famous $2 billion only if it sells VUE “in the most cumbersome and stupid way” — that is, breaking out the pieces and selling them separately. If it unloads VUE in a package, there’s no penalty.
“If we sell to someone only interested in TV, we could buy back the theme parks and buy back the studio” and resell them, he noted. If it’s legal, that solution would open the playing field to a wider range of buyers since it would save them the trouble of unloading unwanted assets themselves.
Viacom, for instance, has said it mostly covets the Sci Fi cable net. GE’s NBC might want Universal’s TV studio plus USA and Sci Fi.
Meanwhile, while Espinasse praised Universal Pictures and the recent box office muscle of “Bruce Almighty,” the studio still seems to be rather unpopular among potential bidders. Espinasse, however, said Viv U does have buyers interested in the studio and theme parks.
Espinasse explained that another $400 million tax to the Bronfman family comes due only if Viv U sells all of VUE and all of Universal Music at once, which it won’t do.
As for another disputed $620 million payment Diller is demanding — a tax on preferred shares — Espinasse said that’s a straight difference of opinion and contract interpretation. “Diller’s saying we have to pay him … We are saying we don’t have to pay.”
Vivendi is asking for formal bids by mid to late June. The only official offer on the table is still the one backed by the Davis consortium, which is offering about $18 billion for a controlling stake of VUE and Universal Music.