Vivendi considers sale of NBC Universal stake


PARIS -- Vivendi is considering the possible sale of its 20% stake in U.S. entertainment group NBC Universal and could start whittling it down early next year, the French media and telecoms group said Friday.

"We are asking ourselves what we will do with this 20% . The question is being asked, will we or will we not stay in NBCU?," Vivendi Chief Executive Jean-Bernard Levy told the Actionaria investor forum in Paris.

"Is now the appropriate time to do it, in January 2007? We have an answer to that question, but I'm not going to give it today," Vivendi Chief Financial Officer Jacques Espinasse separately told an investor conference hosted by Morgan Stanley in Barcelona.

NBC Universal, which is controlled by General Electric, is home to the NBC television network and the Universal Studios film unit.

Espinasse added: "If we don't do it in January 2007, we have another window to do it in 2008, we have another window to do it 2009. In 2010, GE can kick us out if they want to, and we have another window in 2011. I have no answer concerning the NBCU exit. There will be one day Vivendi will be out of NBCU."

Levy also fielded questions regarding last month's failed bid approach from U.S. private equity firm KKR, and Espinasse revealed for the first time that the initial approach from KKR was a joint bid with fellow private equity firm Permira to buy a 20% stake.

"We said, 'We like people who like us and it's very nice, but you know because of our shareholder structure once you have 20%, you can have control of the general assembly meeting, and love stories sometimes start at 20%, but in the end it could end up a full-control situation,"' Espinasse said.

Several Paris- and London-based analysts have long argued that Vivendi would be worth more broken up than in its current conglomerate form.

Earlier this month, Vivendi confirmed that it held talks with KKR but said the private equity firm's proposal would have preserved the group's existing structure. Levy said KKR had not offered a significant premium to shareholders, however.

"After several weeks, KKR came to see me and said, in a word: 'It does not make sense.' After carefully studying the files, we are not able to offer a significant premium," Levy said of KKR. "The chapter is closed," he added, declining to indicate what price was discussed.

Espinasse said KKR had told the company, "It's not doable because it would require too much equity to be done in the way we have discussed it."

Levy said Vivendi had not received approaches from funds other than KKR last month and Sebastian Holdings earlier this year. Asked if Vivendi had received approaches from other funds, Levy only answered: "Nothing which has not been made public."

Vivendi, which owns 56% of France's second-largest mobile operator SFR, also said British telecoms group Vodafone, which owns the balance of SFR, had not made an offer for Vivendi's controlling holding.

Vodafone Chief Executive Arun Sarin said on Tuesday the company was happy with its stake in SFR and would only consider raising its stake at the right price.

Asked whether Vivendi had received an offer for its SFR holding, Levy answered: "No."

"We have never been a seller in SFR. We remain a buyer," Espinasse said in Barcelona. "Clearly we have the financial capability to acquire their stake of 44% if they wanted to sell, and we could do it at a fair price."

Espinasse noted that Vodafone had been selling out of other countries where it was a minority shareholder.

Regarding another telecoms investment, he said Vivendi was not planning to change its 40.7% holding in fixed-line telecoms group Neuf Cegetel, which floated last month.

Vivendi also said it did not intend to buy back shares.

"Regarding those companies that buy back their own shares, there are as many (who do it) whose shares are rising and as many whose shares are falling; we have decided not to do it," he said.


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