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Vivendi Wins Time to Plan Cegetel Step

Court gives media giant an extra month to decide whether to wage a bidding war over the telecom company.

October 29, 2002|From Times Staff and Wire Reports

Debt-heavy Vivendi Universal received welcome news Monday as it moved closer to selling off its U.S. publishing assets and won a legal ruling in the battle to control French telecom company, Cegetel.

A French court granted the media group an additional month to consider its right to block a bid by cell phone giant Vodafone Group to buy out other Cegetel shareholders.

Vodafone, which owns 15% of Cegetel, has offered to pay $12.6 billion for Vivendi's 44% stake in Cegetel along with stakes held by two other shareholders -- BT Group and SBC Communications Inc. The court extended Vivendi's right to make a counteroffer from Nov. 10 to Dec. 10.

The extension gives Vivendi Chief Executive Jean-Rene Fourtou time to decide whether to wage a bidding war for Cegetel, which operates the French mobile phone operator SFR. That option has been complicated by delays in the sale of its Boston publisher Houghton Mifflin, which would provide extra cash to the company.

On Friday a consortium headed by private equity firms Blackstone Group and Thomas H. Lee Partners made an undisclosed offer for Houghton, and Vivendi's board could announce a deal as early as today, said a source close to the board.

Analysts welcome the sale but say it's unlikely Vivendi will get close to the $2.2 billion in cash and debt it paid for Houghton a year ago.

Fourtou is trying to sell off assets to stem a cash crunch left by his predecessor who led a $77-billion acquisition spree that turned a staid water utility into a global giant, with assets including Universal's movie studio, theme parks and a major music company. But the strategy puzzled investors and left the company with $19 billion in debt.

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