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Old May 24th, 2003, 10:31 AM   #20
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Vivendi rolls out roadshow to lure bidders

By Peter Thal Larsen in New York and Tim Burt in London

Published: May 22 2003 21:51 | Last Updated: May 22 2003 21:51

Vivendi Universal will next week hold a series of presentations for potential bidders for its movie, music and cable television units as the auction of the French group's US entertainment assets gathers speed.

The presentations, which are due to be held in New York and Los Angeles, will clear the way for preliminary, non-binding offers for all or part of Vivendi Universal Entertainment. People involved in the auction said first-round bids would probably be due before the end of June.

The field of potential bidders increased this week when Edgar Bronfman Jr, former chief executive of Seagram and a Vivendi board member, indicated he was assembling a consortium to make an offer.

Mr Bronfman will have to compete with several well-capitalised media groups and financial investors, many of which have been circling Vivendi since the distressed group began exploring a sale last year.

Those bids will be reviewed by Citigroup, lead adviser on the disposal. The investment bank is understood to be preparing a data room, which will make detailed financial information available as part of its due diligence.

All bidders will have to navigate a minefield of legal and tax problems that have limited Vivendi's room for manoeuvre. They will also have to deal with Barry Diller, the US media entrepreneur, who effectively has a veto over any changes to Vivendi Universal Entertainment, the holding company that houses the movie studio, cable channels and theme parks.

Jean-René Fourtou, the chief executive who was brought in last year to solve Vivendi's financial crisis, has said the company will raise at least €7bn ($8.2bn) from disposals to cut debts.

Viacom, the media group, and NBC, the media division of General Electric, are thought to be interested in the cable channels. Liberty Media, the investment group controlled by John Malone, and MGM, the independent movie studio, are preparing separate proposals.

Marvin Davis, the US billionaire, has made a financial offer for a majority stake in all the assets, including Universal Music, the world's largest music company. Mr Bronfman's offer is expected to be similar in structure, although the Seagram heir has been joined by Cablevision, the cable group, which is offering to contribute its cable television channels in return for a minority stake.

Mr Davis and Mr Bronfman are expected to propose leaving Vivendi with a large minority stake in the entertainment businesses. This would reduce the amount of cash they need to raise to finance the offer, while allowing Vivendi to avoid a large tax liability which would arise if it sold out entirely.
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