George Mannes
Bronfmans Leave Vivendi Board
George Mannes
12/04/03 - 06:23 PM EST
Hard-luck media mogul Edgar Bronfman Jr. and his dad are resigning from the board of Vivendi Universal (V - Cramer's Take - Stockpickr), the company said Thursday.
The junior Bronfman, who had been vice chairman of the board, is leaving because of his participation in a private-equity group's planned acquisition of Time Warner's (TWX - Cramer's Take - Stockpickr) Warner Music Group, according to Vivendi Universal.
The announcement appears to put an end to Bronfman's role in the governance of Vivendi Universal, created from the December 2000 merger of the French utilities company Vivendi, the French TV network Canal Plus and the Bronfman-controlled liquor/entertainment company Seagram.
That deal turned out to be disastrous for Bronfman, with then-CEO Jean-Marie Messier going on an acquisition binge that led Vivendi Universal to the brink of a liquidity crisis. Shares in Vivendi Universal, which traded above $62 in its early days, traded as low as $8.90 in the summer of 2002. On Thursday, the stock changed hands at $23.36, up 4 cents. The Bronfman family currently owns 3.2% of Vivendi Universal's stock, according to the company.
But getting burned by Messier hasn't made Bronfman shy about jumping further into the entertainment business. In May, Bronfman temporarily shed his board duties to make an ultimately unsuccessful bid for Vivendi Universal's entertainment assets; the company's Vivendi Universal Entertainment subsidiary is instead in a deal to merge with General Electric's (GE - Cramer's Take - Stockpickr) NBC. For now, Vivendi is holding on to its Universal Music Group record company.
Last week, a group including Bronfman, Thomas H. Lee Partners, Bain Capital and Providence Equity Partners announced a $2.6 billion deal to buy Warner Music Group. With Bronfman slated to be the most senior executive of the new Warner, a possible conflict of interest between the Warner and Universal music labels loomed.
According to Thursday's announcement, Vivendi Universal CEO Jean-Rene Fourtou "personally thanked" the Bronfmans "for their trust and their active support to the financial and strategic turnaround of Vivendi Universal."