Biz Briefs

Jul 14, 2003  •  Post A Comment

The two investment teams vying for the U.S. entertainment assets of Vivendi Universal say they are still in the hunt, despite some minor hiccups that surfaced last week while the French conglomerate’s management continued to review the offers.
A spokesman for the investment team headed up by Vivendi Universal Vice Chairman Edgar Bronfman Jr. said his camp remains a bidder, with Cablevision Systems still a participant in the Bronfman deal even as the cable operator faces a possible credit rating downgrade stemming from a Securities and Exchange Commission accounting probe and contends with a restive shareholder who opposes the cable operator’s participation in a Vivendi bid.
The shareholder, Mario Gabelli of Gabelli Asset Management, which has an 11 percent stake in Cablevision, said in a New York Post article Thursday that he opposes Cablevision’s handing over some channels in the Rainbow Media unit to a new company that also would have Vivendi Universal’s film studio, television production operation and cable channels USA, Sci Fi and Trio.
Meanwhile, an investment consortium comprising oil billionaire Marvin Davis and private equity firms Texas Capital Partners and Bain Capital continues to examine its options after Vivendi Universal officials told the group to either raise its offer or walk away, said a source close to the Davis camp.
Sources familiar with the bidding process said Vivendi Universal will likely ask for revised bids within two weeks, with the hope of selecting a winner by the end of the summer.
Court Blocks Messier’s severance payment
Deposed Vivendi Universal CEO Jean-Marie Messier was dealt a setback Wednesday after a Paris court froze the 20.6 million-euro ($23.3 million) severance payment that a New York arbitration panel ordered his former employer to pay him. The court said shareholders of the troubled French company should decide whether Mr. Messier is entitled to the payment.
The ruling came after the French stock market regular Commission des Operations de Bourse asked the court to block the payment in light of the COB’s determination that proper procedures authorizing a payment to Mr. Messier were not followed.
Vivendi said it was pleased with the ruling, adding that it continues to explore legal avenues to ensure it doesn’t have to pay Mr. Messier. “This decision has encouraged the company to continue to take all appropriate legal actions to oppose a payment that it considers illegitimate,” the company said in a statement.
The court’s move is the latest twist in a battle between Paris-based Vivendi Universal and its former CEO over the severance package Mr. Messier says is due to him as part of a termination agreement he claims he signed in July 2002. The imbroglio went before a New York arbitration panel, which in June ordered Vivendi Universal to pay the severance to Mr. Messier.
Cablevision Rating Under Review
Rating agency Standard & Poor’s said it has placed the double-B debt ratings of Cablevision Systems under review for a possible downgrade, citing as the reason the company’s revelation that it is being investigated by the Securities and Exchange Commission for an accounting scandal that resulted in the company’s firing 14 employees.
The review affects $6.4 billion in debt, and if Cablevision is downgraded, the Bethpage, N.Y.-based multiple system operator could have to pay higher costs to borrow funds.
Cablevision revealed last month that it had uncovered $6.2 million in marketing expenses that had been booked improperly to 2003 instead of properly to 2002 and that it suspected similar amounts were improperly booked in two previous years. The company fired 14 executives, including longtime American Movies Classics President Kate McEnroe.