Messier Fears Dismantling of Vivendi

July 2, 2002
Jean-Marie Messier, forced out as chief of Vivendi Universal, expressed fears in an interview published Tuesday that the media and entertainment giant he built would now be dismantled.

``I hear, I see the predators prowling, the advisers putting together breakup plans,'' Messier told the French daily Le Figaro.

``My most earnest hope is that the board of directors, as well as the various authorities concerned, don't wreck this achievement,'' he said.

The boyish-looking Messier's departure as chairman had been anticipated since Vivendi Universal shares tumbled to 13-year lows recently. In the interview, he said he faced pressure from shareholders to step down.

``I am leaving so that Vivendi Universal stays,'' said Messier, 45.

``I built this company with my team. I love it passionately. But there is an undeniable truth – you cannot lead a company if the board is divided,'' he said. Messier also said he agreed to step down only after receiving assurances that his successors would be French.

Company spokesman Alain Delrieu said Messier called a special board meeting for Wednesday to let directors oust him.

Messier's downfall marks the failure of his grand vision to build a media and entertainment empire through costly acquisitions. They included a $30 billion buyout of Canada's Seagram and a $10.3 billion purchase of USA Networks Inc., the cable and entertainment company run by Hollywood mogul Barry Diller.

Messier, who shook the French establishment with his penchant for U.S.-style corporate management at Vivendi, made a foe of its top shareholder – the Bronfman family – which strongly backed his vision only two years earlier.

The daring buyout spree led by Messier to create one of the world's biggest media companies covering film, music, television and mobile phone networks eventually saddled Vivendi with huge debts that rattled investor confidence in the once high-flying company.

In the latest sign of trouble, the ratings agency Moody's downgraded Vivendi's long-term debt to junk status Monday and said it was considering further downgrades, citing concerns over Vivendi's ability to service its debt, its recent acquisitions and its failure to complete sales of certain assets.

Vivendi Universal shares slipped more than 12 percent in early trading Tuesday on the Paris bourse.

French media reports said Vivendi's board is expected to name Jean-Rene Fourtou, vice-chairman of the supervisory board of French-German pharmaceutical giant Aventis, for a six-month interim chairmanship. Le Figaro said Fourtou is seeking a longer mandate.

If Fourtou replaces Messier, he is expected to push for a restructuring of the conglomerate, breaking it down into more manageable parts. A breakdown would signal the demise of Messier's dream of a global company capable of delivering movies and music to consumers via televisions and mobile phones.

Vivendi Universal, Messier's brainchild, was born of the merger of Vivendi, Canal Plus TV and film studios, and Canada's Seagram – the owner of Universal Studios and Universal Music.

The plan has failed to live up to expectations. Investors, once impressed with Messier's vision, have grown nervous about his ability to meld together the company's diverse businesses and reduce its borrowings. Vivendi's shares have fallen nearly 70 percent this year.

Even though it's now one of the world's biggest media companies, Vivendi Universal has its roots in water and spirits businesses.

Messier took the helm of the former French water utility Compagnie Generale des Eaux – General Water Company – in 1996, and re-christened it Vivendi two years later. Seagram was a liquor company for generations, and acquired the Universal music and film properties in the late 1990s.

Source: AP

Image courtesy Institute of Chemical Research of Catalonia (ICIQ).
All images courtesy of Ecosorb.