MGM to sell non-core cable assets to underpin Vivendi bid

1 Jul 2003

Entertainment giant Metro-Goldwyn-Mayer (MGM) is expected to raise USD500 million from the sale of non-core cable assets to help underpin its USD11 billion offer for Vivendi Universal’s entertainment arm VUE. The company is selling its 20% stakes in three cable channels – Women’s Entertainment, AMC and IFC – to New York-based Cablevision Systems for USD250 million in cash and USD250 million in deferred notes. The deal comes on the same day that MGM is due to meet with executives at the Paris-based media conglomerate to discuss its bid for VUE; MGM has submitted a bid of USD2 billion in cash along with USD7 billion of debt and a further USD2 billion of cash or stock. MGM is one of six bidders for the company.

In a separate, but related story, former Vivendi chief executive Jean Marie Messier has had his claim to a EUR20.6 million pay-off upheld by an independent disputes tribunal in New York. Jean-Rene Fourtou, who succeeded Mr Messier last July, has vowed to fight the compensation package through both the US and French courts. The compensation package – almost four times Mr Messier’s EUR5.12 million salary in 2001 – was allegedly agreed by two non-executive directors just days before the chief executive was forced to resign.

French Guiana