Jean-Marie Messier, chief executive of Vivendi Universal, a major player in European pay-TV broadcasting and the acquisition of sports media rights, has announced that the firm will monetise the stake in a four-year equity swap with Deutsche Bank – a move essentially meaning that the German bank will loan Vivendi Universal the sum in question with the BSkyB stake serving as collateral.
Following the merger between Vivendi and Seagram Universal on December 5 last year, the newly formed media giant has been looking for a buyer for its BSkyB stake either in the form of a strategic asset swap or through a sale to institutional investors. The European Commission instructed that such a sale should take place within two years of the signing of the deal if the Vivendi Universal merger was to secure its approval.
By monetising the BSkyB stake, Vivendi will comply with the EC media ownership regulations while retaining its economic link to the highs and lows of the satellite broadcaster’s share price. However, Vivendi will concede any voting rights within the broadcasting corporation. BSkyB shares have dropped by 45 percent since the start of the year in line with the general market trend.
One adviser close to the transaction with Deutsche Bank commented: “This monetisation doesn’t get Vivendi any closer to finding an ultimate owner for the BSkyB stake, so the overhang issue for BSkyB will remain. However, Mr Messier can now decide when he wants to relinquish economic ownership of the shares in his own time.”
The announcement was made amid Vivendi Universal’s half-year income report which saw the media giant predicting a strong performance next year off the back of six months revenue totalling B1.1bn ($1bn).
