VIVENDI, SEAGRAM SHAREHOLDERS
OK $23 BILLION-DOLLAR BABY
Vivendi and Seagram shareholders met and approved plans today to create a new global media giant by merging France's Vivendi and Canal Plus with the Canadian entertainment conglom.
At the Louvre in Paris, 95% of some 7,000 Vivendi shareholders said yes to the $23 billion deal, while in Montreal, 90% of Seagram's shareholders voted in favor of the pairing, far more than the two-thirds required for it to pass.
Vivendi Chairman Jean-Marie Messier held up two fingers in a "V" for victory salute (also the company's ticker symbol on the New York Stock Exchange), saying, "Through your vote, Vivendi Universal is born. You are the parents. I can assure you we can make a great child." He added he would not allow the child to be adopted by AOLTW, either.
Seagram President/CEO Edgar Bronfman Jr., who joined the Paris meeting by video-link from Montreal, said the vote shows that his company's shareholders recognize the "real and immediate growth prospects" that the merger will generate.
"Our shareholders' approval is one more step toward the beginning of an exciting new era for this global media and communications company," Bronfman said. "Vivendi Universal offers shareholders tremendous growth prospects. We are certain that, with this merger, Vivendi Universal will be totally integrated with a range of products which no one else will be able to match." Seagram plans to sell off their $8 billion liquor business, which has been in the family for three generations, within the next few weeks.
The only hurdle left now is a vote by stockholders of French pay TV group Canal Plus, which will not take place until Friday (12/8).
After that formality, Vivendi Universal will begin trading on the New York and Paris stock markets on Monday (12/11). On Tuesday, Vivendi's U.S.-trades shares were up 5.5%, or 69 cents, to close at $13.19 on the NYSE.
The new company will offer movies, TV programming, music, sports, games and educational information via digital and analog formats like computers, televisions and mobile phones, combining content and distribution.
On the eve of the voting, French opponents to the merger took one last shot at derailing it. According to Variety, the BLIC, the BLOC and the ARP—which are either the bodies that represent most of the French film industry or the French version of the Rice Krispies guys—on Thursday (11/30) announced that they were appealing the French broadcasting authority's approval of the deal on the grounds that the merger poses "a grave threat to Canal Plus and its viability."
The French film industry depends heavily on Canal Plus, which, by law, helps finance about 80% of the films made in France. The fear is that once the merger goes through, Vivendi Universal will try to extricate itself from those commitments. French filmmakers Claude Lelouch and Bertrand Tavernier were among the 73 signatories of a petition denouncing the merger.
Despite the 11th-hour protest, observers said the Conseil d'Etat (the French equivalent of the Supreme Court) is unlikely to overturn the broadcast authority's decision.
At current market prices, the all-stock deal is worth about $23 billion, down roughly $7 billion from when the deal was first announced.
