Vivendi Hints At Compromise

Vivendi would be willing to offload some of its recently acquired BMG music-publishing catalog if that would ease the European Commission’s concerns over the deal.

French newspapers and the U.K.’s The Times reported Jacques Espinasse, Vivendi’s chief financial officer, saying the company would consider disposing of part of the euro 1.6 billion catalog it acquired from the German media giant if it would sway the monopolies inspectors.

Coming three weeks before the Commission completes its first-stage review of the deal (December 8th), Vivendi may also be ensuring that it’s seen to be sending out the message that it’s prepared to appease Europe’s independent music companies.

It was partly due to pressure from the indies, through their Impala trade organization, that led the European Court of First Instance to overturn the EC’s verdict on the Sony BMG deal and warn it to be more diligent when investigating future deals.

As the indies are already lodging their objections to Universal’s acquisition of BMG, the EC may decide to conduct further studies and take the review process beyond the current December 8th deadline.

Without an asset disposal, and a considerable disposal at that, the deal would create the world’s largest music publisher. The indies are equally concerned that it will further reduce the number of major music publishers.

Third quarter figures issued by Vivendi November 16th showed that its Universal Music – with Anastacia its current top performer – improved operating income by 11.3 percent to euro 138 million.

The Vivendi group’s third quarter net profits were euro 731 million, up 28.2 percent year-on-year.

Having knocked back a takeover bid from U.S. investment house Kohlberg Kravis Roberts, Vivendi also let it slip that it gave the same treatment to earlier overtures from KKR and Permira, the U.K. private equity group.

The U.K.’s Financial Times reported Espinasse saying that Permira and KKR originally made a joint overture to discuss taking a 20 percent stake in the group.

— John Gammon