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Vivendi Gets Offer for Its Publishing Division

Media: Buyout firms led by a BNP Paribas unit propose $2.9 billion to $3.4 billion for assets including Houghton Mifflin, sources say.


PARIS — Vivendi Universal received an offer of $2.9 billion to $3.4 billion for its publishing unit from buyout firms led by BNP Paribas' private equity arm, people familiar with the matter said.

BNP's PAI Management has proposed buying 35% of the unit, which includes Houghton Mifflin Co. Among the firms that would split the rest of the publishing business are Kohlberg Kravis Roberts & Co., Apax Partners Inc., Bain Capital Inc., Blackstone Group and Thomas H. Lee Partners, sources said.

Vivendi aims to sell assets worth almost $10 billion within two years as the world's No. 2 media company reverses the $77-billion expansion by former Chief Executive Jean-Marie Messier. Struggling with $18 billion in debt, Vivendi already has slashed prices for a French publisher of trade journals and its pay-TV business.

"Vivendi needs the money to guarantee its survival," said Matthieu Giuliani, who helps manage $1.95 billion at San Paolo Asset Management and owns Vivendi shares.

Mia Carbonell, a spokeswoman for Paris-based Vivendi, declined to comment on the sale, as did spokesmen for KKR, Thomas H. Lee, Bain, Apax and Blackstone. Michael Sandler, a spokesman for PAI Management, also declined to comment.

Vivendi shares rose 39 cents to $13.76 on the New York Stock Exchange. The stock has lost 74% of its value this year.

Houghton Mifflin, the Boston-based publisher of J.R.R. Tolkien's "The Lord of the Rings" and the "Curious George" children's books, is worth $1.4 billion to $1.7 billion, Morgan Stanley analyst Sarah Simon said. The rest of the publishing unit is worth about $2 billion.

Vivendi bought Houghton Mifflin for $2.2 billion last year.

Shares of Vivendi have lost a quarter of their value since Jean-Rene Fourtou replaced Messier on July 3 and began talks with lenders. When he joined, Fourtou said the company was "on the verge of default."

After getting a $980-million loan, Vivendi is in talks for an additional $1.95 billion.

A sale "would certainly give Vivendi much needed cash and alleviate worries of a cash crunch, at least until March," said Hank Forsyth, an analyst at Dresdner Kleinwort Wasserstein in London. "They still have a valuable group of assets."

Vivendi Universal is in negotiations over the sale of its pay television technology business to French electronics company Thomson Multimedia for some $194.6 million, sources close to the talks said.

Negotiations with Thomson over Vivendi's Canal Plus Technologies unit are at an advanced stage, sources said. Thomson Multimedia already owns 3% of Canal Plus Technologies but previously had ruled itself out of the running.

Vivendi plans to sell Canal Plus Technologies as part of a breakup of its pay-television division.

A sale of Vivendi's publishing business may be opposed by the government, some analysts said. France's minister of culture, Jean-Jacques Aillagon, said over the weekend he was concerned about a sale to foreign buyout funds.

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