French media group Vivendi Universal yesterday announced losses of E13.6 billion, largely due to deal-making by Vivendi CEO Jean-Marie Messier in order to build the company into the second largest media group in the world. The deals, made during market peaks over the past 18 months, have resulted in a huge write-off for Vivendi as the value of the deals crumbles in the current market downturn.
The largest of the write-downs was E6 billion relating to French pay-tv business Canal+ and E3.1 billion at Universal Music. Other areas adding to the loss were Universal Studios, the company’s internet division and international telecoms.
“Sometimes there is a confusion between write-offs and the creation and destruction of value,” said Jean-Marie Messier at a news conference in Paris, “given that the acquisitions were virtually all paid in shares not cash, this non-cash charge does not represent any value destruction.”
“We have not destroyed value for our shareholders,” he added citing analyst speculation that Vivendi would be valued at E5-10 less a share had it not acquired Seagram and Canal Plus.
Revenues from media and communications were E28 billion representing a 10% growth in pro forma revenues with various exclusions and EBITDA was E5,036 billion.
Shares in Vivendi fell in both France and New York following the announcement.
