A timely tome to cool deal fever.
Whether just sipping their Perriers or fingering their Palm Pilots, they could all mull their valuations for VUE--and while they're about it, they could do worse than read "The Man Who Tried to Buy the World," the new book about Jean-Marie Messier's empire-building appetite that details how they've all come to this in the first place.
There's no consensus, after all, that buying the entertainment assets of the French-owned conglom will improve the fortunes of any of the prospective buyers, including presumed frontrunner GE/NBC. (Making aircraft engines is one thing; making movies is quite another, say deal detractors.)
Comcast, for example, has apparently decided the VUE assets aren't even worth $10 billion and is declining to bid.
There is, after all, no rule that says Vivendi will automatically extract top dollar from an auction of its assets, whether sold in a bundle or piecemeal to different buyers. (Right now Viv wants $14 billion.)
For that matter, the value of the parts in motion here--both bidder GE's NBC and seller VUE's USA, for example, are facing increasingly fierce competition--may actually be headed down rather than up.
Despite the criticism of Fourtou and company for being "so French and taking so long," it's arguable that everyone involved should take a breather and consider why they're doing what they're doing: What, in other words, is the rationale for owning these assets?
Had Fourtou's hyperactive predecessor Messier, for example, been compelled to spell out his plans and mend his spendthrift ways, the conglom might still be thriving and there'd be no reason to sell now.
That's one of the themes implicit in "The Man Who Tried to Buy the World," which will be published in French and in English on Nov. 10.
Written by Financial Times Paris-based correspondent Jo Johnson and Le Monde biz writer Martine Orange, the 250-page tome offers several cautionary tales, convincing in their telling and wide-ranging in their implication for other businesses.
Take the crucial deal that Messier concocted to buy back Barry Diller's TV holdings, sold to him only three years before by then Seagram/U chair Edgar Bronfman Jr. for $5 billion.
In recounting how Messier steamrolled past his financial advisors, the Viv U board and Bronfman himself to get the deal for USA Networks done, the authors contend that had Messier listened to reason--or had naysayers spoken up more decisively--the company would not be in the pickle it is today.
The acquisitive Messier was fixated on a grandiose scheme whereby movies, music and TV shows, owned by Universal, would be watched on people's wrist-watches, through a service owned by U.
In keeping with this vision of a global, interactive colossus, he decided practically overnight that a buyback of U's former TV holdings was essential. (He had in a space of six months already overspent for publisher Houghton Mifflin, wireless startup Vizzavi, Internet portal Uproar, even a telco in Morocco.)
In their indictment, the authors argue Messier behaved "as though the lessons from Enron and all the other corpo-rate scandals that had created a sense of crisis of capitalism did not apply to him."
No matter what it would cost, Messier wanted to be able to say he had enticed the maverick Diller to essentially work for him.
Both Bronfman and Messier's closest financial advisers, led by Guillaume Hannezo, warned that the transaction would be much too expensive.
But Messier, who consistently underestimated the conglom's debt level and hadn't seemed to notice the Internet bubble had burst, plowed ahead.
During a crucial trans-Atlantic videoconference meeting in December 2001, per the authors, the Viv U directors failed to ride herd on their out-of-control chairman-CEO.
Nor did they know just how stunningly onerous were the terms Diller managed to extract for himself.
As the book describes Diller's manipulation of the smug but self-deluded Messier, "The scorpion had stung."
There are lessons here for those on both sides of the Viv U fire sale: Put ego aside, focus on present valuations and future prospects, and listen to critics, whether within or outside of one's own fold.
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|Title Annotation:||The Man Who Tried to Buy the World by Martine Orange|
|Article Type:||Book Review|
|Date:||Aug 18, 2003|
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