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Marvin Davis Said to Offer $15 Billion for Vivendi Universal

November 21, 2002|James Bates and Richard Verrier | Times Staff Writers

Billionaire Marvin Davis and a group of investors have approached Vivendi Universal SA with a proposal to buy its entertainment assets, including Universal Studios and its theme parks, sources close to the proposal said Wednesday.

While some Vivendi insiders said the $15-billion offer was too low to be taken seriously, others said that, depending on how it was structured, it could provide the answer to many of Vivendi's financial woes -- including nearly $19 billion in media debt.

One major hurdle is expected to be resistance from Barry Diller, co-CEO of Vivendi's entertainment unit. Diller has expressed coolness toward Davis' overtures, sources say.

Skeptics noted that Vivendi Universal CEO Jean-Rene Fourtou has not been seeking buyers for the Universal assets, unlike other parts of the French media empire that are being auctioned off to pare the company's debt load. Fourtou already has sold Vivendi's Internet business, Italian pay TV operation and has announced a deal to sell U.S. book publisher Houghton Mifflin.

"I don't think they're feeling any pressure to sell the studio," one executive said.

Any deal is likely to include Vivendi as a partner, with Vivendi retaining a piece, sources said. Sources close to Davis say he is confident he can buy the assets at a relatively good price, cut costs, stabilize management and go public in about three years.

Sheldon Ausman, a former Davis employee, was unaware of the offer but said it did not surprise him. "Marvin is a very capable entrepreneur and he knows an opportunity when he sees it."

The deal is being put together by a group called Universal Partners, a consortium that includes Davis and other financiers. Deutsche Bank has offered to help finance the deal and others are showing interest, sources said.

This month, three Davis advisors met with three Vivendi advisors. Davis could not attend. Fourtou did not attend either, but did meet Deutsche Bank. Davis and Fourtou have been talking regularly by phone, and by correspondence.

The fledgling proposal marked the latest foray into the limelight for Davis, who has parlayed a long string of savvy oil and real estate deals in Denver into a glamorous Hollywood lifestyle that once included owning the 20th Century Fox studio. Davis and his partners bought the studio for $720 million in 1981, then selling the money-losing operation for a $350-million profit to Rupert Murdoch four years later.

At a 1986 dinner, Davis said of the entertainment business: "I love this stuff, the people and the glamour. This isn't just a business. It's a ... lot of fun."

Davis has been among the richest individuals in L.A., with a net worth recently estimated by Forbes at $4.5 billion.

Davis has been known almost as much for the assets he came close to buying, but never did, as he has for the deals he consummated.

Davis has a reputation as a savvy investor, but one who passes when at a too-high price.


Times staff writer Sallie Hofmeister contributed to this report.

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