SoftBank, a Japanese phone carrier, made its bid to Vivendi’s board about three months ago, according to this person, who spoke on the condition of anonymity. Spokesmen for Vivendi and Universal declined to comment, and representatives of SoftBank could not be reached Thursday afternoon. The news of the offer was previously reported by The Financial Times.
Vivendi has been under pressure from shareholders to sell assets or split, and while the company has tried to refocus itself around its media divisions, which include Universal, the video game company Activision Blizzard and the film and television company Canal Plus Group, it has had difficulty selling off telecoms. Vivendi canceled the sale of GVT, its Brazilian telecommunications unit, after failing to find a satisfactory price, and it is in the midst of selling its majority share of Maroc Telecom to Emirates Telecommunications, known as Etisalat.
SoftBank is buying Sprint Nextel for $21.6 billion, a deal that has been approved by Sprint’s shareholders but still needs the blessing of the Federal Communications Commission.
The bid for Universal underscores the attractiveness of large music and media catalogs in the digital age, even as record companies struggle to replace revenue from lost CD sales. Consumers are increasingly turning for their entertainment to streaming services like Spotify and Netflix, which sell access to music or movies and rely on licensing deals with media companies.
Universal is the world’s largest music company, with hundreds of artists including Kanye West and U2. In late 2011 it paid $1.9 billion for the recorded music assets of EMI, although European regulators demanded that Universal sell about a third of EMI, along with other assets; this month Vivendi reported that those sales raised about $850 million.
Last year Universal had $6 billion in revenue, and $694 million in earnings before interest, taxes and amortization.
The bid for Universal also comes as Sony faces pressure from Daniel S. Loeb, an American hedge fund mogul, to sell its entertainment arm, which includes Sony Music Entertainment, Universal’s biggest competitor. So far Sony has rebuffed those demands.
Analysts expressed disappointment that Vivendi’s board did not accept SoftBank’s offer. Allan C. Nichols, a telecommunications analyst at Morningstar, valued Universal at about $5.8 billion after its EMI deal closed last year; Sanford C. Bernstein Company’s estimate is $6.3 billion. “I think it’s crazy to have had that size offer and not taken it,” Mr. Nichols said. “It’s a shame for shareholders.”
Article source: http://www.nytimes.com/2013/07/19/business/media/vivendi-declined-softbanks-lucrative-offer-for-universal.html?partner=rss&emc=rss
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