Davis vs. Diller in battle for entertainment unit
By PHYLLIS FURMAN
DAILY NEWS BUSINESS WRITER
Barry Diller with ousted Vivendi boss Jean-Marie Messier Marvin Davis has launched a $20 billion bid to snare the show biz assets of Vivendi Universal, setting up a battle between the billionaire oilman and his former nemesis Barry Diller.
Vivendi rejected Davis' bid, but insiders said the former 20th Century Fox studio chief will come back to the table with a more tempting offer to entice cash-strapped Vivendi.
"This is very serious, it's not just kicking tires," a source close to Davis told the Daily News. The source said both sides met Nov. 5 and will meet again after Jan. 1. Vivendi's stock soared 19% yesterday to close at $14.
Vivendi spokeswoman Anita Larsen said "the sale of the Vivendi Universal Entertainment assets is not on the agenda."
"The offer's too low-ball," said a source close to Vivendi.
Vivendi's precarious finances may force it to take Davis' cash. The company is loaded down with $19 billion in debt, a holdover from ousted boss Jean-Marie Messier's wild shopping spree. Yesterday, Vivendi floated a $1 billion bond issue - and had to pay all three years' worth of interest - $230 million - upfront to get the deal done.
Still, Davis faces serious roadblocks from Diller, who has plans of his own for the show biz assets - which include Universal Pictures, Universal Studios, the USA cable network and Sci Fi Channel.
Vivendi chairman Jean-Rene Fourtou tapped Diller to run the entertainment group with the goal of taking it public in the next four to six months. Fourtou has said he wants Vivendi to remain a media company and would retain an interest after the spinoff.
Diller has tussled with Davis in the past. The 77-year-old oilman and studio exec hired Diller to run 20th Century Fox after he bought it in 1981. But the two hard-charging execs fought as the studio faltered. Diller even threatened to sue Davis for fraud, before Davis sold Fox to Rupert Murdoch.
Diller could make big trouble for Davis' deal. When Diller's company, USA Interactive, sold Vivendi its entertainment assets, it extracted an assurance from Vivendi that it would be paid $2 billion if the assets were sold to another party. A Davis source said that he does not see that as an impediment to a deal.
Porter Bibb, a partner in Technology Partners said Diller wins either way because he'll pocket a huge payday if Davis prevails. "Barry's in the catbird seat. They have to pay him $2 billion and he still owns 1.5% of Vivendi Universal Entertainment," Bibb said.
But if Davis wins, Diller will be out of a job. The oilman said he would install a new management team at the show biz empire, including former Universal Pictures co-chairman Brian Mulligan in a key role. But Davis signalled yesterday he'd stand by Universal Studios chief Ron Meyer and Universal Music boss Doug Morris.
Diller has said he considers running the Vivendi show biz empire as a temporary position, with USA Interactive being his primary job. But given his history of battling with Davis, it's unlikely he'd want to see Vivendi fall into Davis' hands.
Originally published on November 22, 2002
_http://www.nydailynews.com/11-22-20...32p-35328c.html
By PHYLLIS FURMAN
DAILY NEWS BUSINESS WRITER
Barry Diller with ousted Vivendi boss Jean-Marie Messier Marvin Davis has launched a $20 billion bid to snare the show biz assets of Vivendi Universal, setting up a battle between the billionaire oilman and his former nemesis Barry Diller.
Vivendi rejected Davis' bid, but insiders said the former 20th Century Fox studio chief will come back to the table with a more tempting offer to entice cash-strapped Vivendi.
"This is very serious, it's not just kicking tires," a source close to Davis told the Daily News. The source said both sides met Nov. 5 and will meet again after Jan. 1. Vivendi's stock soared 19% yesterday to close at $14.
Vivendi spokeswoman Anita Larsen said "the sale of the Vivendi Universal Entertainment assets is not on the agenda."
"The offer's too low-ball," said a source close to Vivendi.
Vivendi's precarious finances may force it to take Davis' cash. The company is loaded down with $19 billion in debt, a holdover from ousted boss Jean-Marie Messier's wild shopping spree. Yesterday, Vivendi floated a $1 billion bond issue - and had to pay all three years' worth of interest - $230 million - upfront to get the deal done.
Still, Davis faces serious roadblocks from Diller, who has plans of his own for the show biz assets - which include Universal Pictures, Universal Studios, the USA cable network and Sci Fi Channel.
Vivendi chairman Jean-Rene Fourtou tapped Diller to run the entertainment group with the goal of taking it public in the next four to six months. Fourtou has said he wants Vivendi to remain a media company and would retain an interest after the spinoff.
Diller has tussled with Davis in the past. The 77-year-old oilman and studio exec hired Diller to run 20th Century Fox after he bought it in 1981. But the two hard-charging execs fought as the studio faltered. Diller even threatened to sue Davis for fraud, before Davis sold Fox to Rupert Murdoch.
Diller could make big trouble for Davis' deal. When Diller's company, USA Interactive, sold Vivendi its entertainment assets, it extracted an assurance from Vivendi that it would be paid $2 billion if the assets were sold to another party. A Davis source said that he does not see that as an impediment to a deal.
Porter Bibb, a partner in Technology Partners said Diller wins either way because he'll pocket a huge payday if Davis prevails. "Barry's in the catbird seat. They have to pay him $2 billion and he still owns 1.5% of Vivendi Universal Entertainment," Bibb said.
But if Davis wins, Diller will be out of a job. The oilman said he would install a new management team at the show biz empire, including former Universal Pictures co-chairman Brian Mulligan in a key role. But Davis signalled yesterday he'd stand by Universal Studios chief Ron Meyer and Universal Music boss Doug Morris.
Diller has said he considers running the Vivendi show biz empire as a temporary position, with USA Interactive being his primary job. But given his history of battling with Davis, it's unlikely he'd want to see Vivendi fall into Davis' hands.
Originally published on November 22, 2002
_http://www.nydailynews.com/11-22-20...32p-35328c.html
