EURO ANALYSTS LIKE PLANNED VIVENDI-UNIVERSAL CONGLOM

Vivendi Universal's soft-shoe received favorable reviews from European analysts Monday, but the future of the media giant's Internet venture Vizzavi remains cloudy at best.

Company officials accompanied its latest vision of a conjoined Vivendi Universal with a barrage of figures on Thursday and Friday.

"This is a very judicious strategy," said CIC EIFB analyst Jean-Antoine Breuil, referring to the marriage of content with distribution outlets along the lines of America Online-Time Warner. Another Paris-based media analyst added, "I was very impressed by the Universal people's presentation. They are remarkable financiers.''

Vivendi Universal grabbed last-minute approval for its merger from the European Commission Friday, following the hard-line the body took to the proposed Warner Music Group-EMI merger. The EC's rigid policy towards WEMI moved the two music giants to withdraw their merger plans (hitsdailydouble, 10/5).

Analysts said concessions Vivendi had to make to seal the deal, including selling its 20% stake in Rupert Murdoch's BSkyB within two years, were not surprising.

Brussels' approval boosted Vivendi and Canal Plus shares in morning trade, but the rally was short-lived. Vivendi rose 0.47% to 85.30 euros ($72.66) and Canal was up 1.29% at 172.1 euros, both in unusually strong volume.

Under the terms of the merger, Seagram's Universal film and music subsidiaries and Canal Plus' television and film activities will combine with Vivendi's fixed and mobile phone businesses and its emerging Internet activities.

However, Vizzavi's rollout and the role it could play in the online marketplace remain to be seen.

"The speed with which Vizzavi can be deployed and its penetration in Europe... remains the major unknown,'' CIC EIFB's Breuil wrote in a market note Monday, Reuters said. "The only question mark is Vizzavi, which remains an empty shell."

In approving the merger last week, the EC wrote: "Vivendi offered substantial undertakings to address the competition problems, notably to divest its stake in BSkyB and to give rival pay-TV operators access to Universal's films"

Vivendi made a commitment to share TV rights to Universal movies in France, Belgium, Italy, the Netherlands, Spain, Denmark, Sweden and Finland for five years. The firm also agreed to give Vizzavi's rivals access to Universal's online music content.

The commission said it "believes these undertakings reduce significantly the ability of Canal Plus to influence other major U.S. studios and eliminate the serious doubts as to the strengthening of a dominant position of Canal Plus following its vertical integration with Universal."

The deal has already been cleared in the U.S. by the Federal Trade Commission and in France by regulators. It has passed one of the three regulatory bodies it needs to pass in Canada.

Vivendi, Canal Plus and Seagram shareholders now must sign off on the deal.