News Corp and British Telecommunications Plc are reported to be planning a hostile bid for Vivendi SA, and intend to dismember the French conglomerate for its media and telecommunications assets. While an official at Vivendi refused to comment on the report in the French daily Le Figaro, the rumor was sufficient to push Vivendi’s shares up 3% to 73.25 euros on the Paris Bourse yesterday.
The logic of the deal is that media group News Corp sees Vivendi as the key to its European ambitions through its ownership of 49% of TV group Canal Plus. News Corp would also gain Vivendi’s 25% ownership of shares in BSkyB. A takeover of Vivendi would give BT control of France’s number two telco Cegetel. It currently owns 26% but 50% of Cegetal is owned by Transtel in which Vivendi owns at 70% stake.
While Vivendi has expanded rapidly into multimedia and communication, the company still has a strong base in water and other utilities. This could make it vulnerable to a hostile takeover because it acts as a drag on its share price.
