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Old May 21st, 2003, 01:15 PM   #15
peter noble
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Default From www.forbes.com

By Noah Barkin and Merissa Marr
PARIS/LONDON May 21 (Reuters) - Vivendi Universal said on Wednesday its vice chairman, Edgar Bronfman Jr., was leading an effort to buy back the U.S. entertainment assets he sold to the French-American media group three years ago.

Vivendi said it was suspending Bronfman Jr. and his father from the board after the vice chairman informed the company he planned to head a consortium of potential buyers for assets including Hollywood's Universal Studios.

Vivendi Chairman Jean-Rene Fourtou announced plans last month to sell the group's U.S. assets to cut debt, saying it was "illusory" to think the firm could run a U.S. empire spanning Universal Studios, theme parks and cable TV from Paris.

In an interview with Wednesday's Wall Street Journal, Bronfman Jr. said his consortium would include U.S. cable operator Cablevision Systems Corp., which would contribute cable networks and take a 25-33 percent stake.
Cablevision declined to comment, but a person familiar with the matter told Reuters that Cablevision was expected to participate in the bid.

Bronfman Jr. told the newspaper his family would contribute cash to an offer, while U.S. bank Wachovia Corp.'s Wachovia Securities would put together debt financing as would U.S. brokerage giant Merrill Lynch & Co.

Merrill would also advise on the deal, and the Journal cited sources as saying the bank was also considering taking a stake. A spokesman for Merrill Lynch declined to comment.

"These businesses belong together and I want to keep them intact. I built these management teams and helped them build the businesses. I know there is more value out there," Bronfman Jr. told trade daily Variety in a separate interview.

Vivendi shares were up 5.3 percent at 14.63 euros at 0930 GMT, outperforming the media sector with the DJ Stoxx pan-European media index down 0.8 percent.

FULL CIRCLE

The Bronfman family sold their Seagram media and entertainment assets including Universal Studios and Universal Music to Vivendi in 2000 amid a media merger frenzy sparked by the deal between AOL and Time Warner But under the leadership of former Vivendi chief Jean-Marie Messier, the family lost a huge part of their investment and Vivendi came close to collapsing under its huge debt pile. Bronfman Jr. was instrumental in Messier's ouster.

Bronfman Jr. told the Wall Street Journal he was interested in bidding for assets including Universal Studios, Universal Music and the USA and Sci Fi cable television networks.

Vivendi has not officially put Universal Music up for sale, but sources close to the company say it would consider bids for the music company, which ranks No.1 in the world.

Sources close to the matter told Reuters on Tuesday Vivendi was in talks with four or five groups on the sale of the U.S. business and a deal could be signed as early as this summer.

"Vivendi Universal is in open discussions for the disposal of parts of its American assets," the French-American company confirmed in a statement on Wednesday.

Vivendi had already said it has held talks with U.S. media group Viacom and Texan oil billionaire Marvin Davis. U.S. cable group Liberty Media also told its investors earlier this month it is interested in some of the assets.

However, Davis is the only one so far to step forward with an offer for all the assets plus Universal Music.

(additional reporting by Daniel Sorid in New York, Caroline Brothers in Paris)
Copyright 2003, Reuters News Service
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