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MESSIER TO STEP DOWN

VU Boss Calls it Quits After Boardroom Mutiny

Succumbing to increased pressure from the Bronfman family and others on the company board, Vivendi Universal CEO Jean-Marie Messier has agreed to resign from his post, according to numerous published reports.

Messier’s move today follows a dramatic boardroom mutiny regarding his embattled leadership of the French media and utility company. His resignation comes on the heels of his losing support of the company’s board over the weekend.

Shares in the world's second largest media firm soared almost 20% as investors celebrated what looked like the last chapter of a two-year, debt-fueled adventure that propelled the French water firm to a big player in Hollywood, Reuters reports.

French newspaper Le Monde said Messier had reluctantly agreed to leave after a 60% drop in Vivendi's share price but was wrangling over the terms of his departure.

Over the weekend, some French directors, who had previously defended Messier against attacks by North American board members, decided to nominate Jean-Rene Fourtou to succeed Messier. Fourtou, a respected executive in France, is Vice Chairman of the supervisory board of Franco-German pharmaceutical company Aventis. If his nomination is agreed to formally by Vivendi's board, Fourtou is expected to embark immediately on a restructuring plan to sell off assets and reduce the company's debt, in what would effectively be a breakup of one of the world's largest media companies.

Vivendi declined comment but sources close to the company told Le Monde that Messier had rallied a hard core of supporters including Vivendi's number two Eric Licoys for a crisis meeting.

Messier has been universally blamed for Vivendi's recent woes after transforming the 150-year-old former water company into a global media titan with control of Universal Studios and Universal Music Group.

After a manic acquisition spree, Messier left Vivendi struggling with a huge debt pile, a sliding share price and France's biggest loss in corporate history. A series of fumbled announcements further dented investor confidence.

French newspaper Liberation reported on Monday that Vivendi's six European directors had joined in with a rebellion by U.S. board members by demanding Messier's resignation.

Only last week, the same board members had defended Messier from calls to resign from U.S. board members. Now the stormy reign of the chief executive who built an entertainment empire spanning music, film and television, looks set to collapse.

The rise in Vivendi stock added to strong gains last Friday as the markets buzzed with talk of unusually large share purchases with 10% of the stock traded in five days. That sparked fears in France that Vivendi could be broken up or fall into American hands, forcing Messier loyalists on the board to act quickly to hold the Franco-American group together, Reuters said.

Even without Messier, Vivendi will have to decide what to do about its 19 billion euros of debt and heal the board divisions which have shattered his dream of forging a Franco-American giant despite vast differences in business culture.

U.S. board members have been calling for Messier's exit for some months. Supporters of Vivendi's biggest shareholder, the Bronfman family, again demanded his resignation last Tuesday but he clung on with the support of his French allies. But that was when there was no obvious candidate to replace Messier. With a successor now in sight, Messier's French allies are more willing to part ways with the chief executive.

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