Bid to break up Vivendi gathers momentum

Vivendi shareholder Alexandar Vik has received backing for his bid to break the company up in the form of a EURO 19 billion investment from the Bank of America and Deutsche Bank.

Vik's investment company, Sebastian Holdings, first made a breakup offer last week - offering up to EURO 33.5 per share and valuing the company at EURO 40 billion. Vivendi rejected the deal, and continues to insist that there are no plans to break up the company.

Vik owns a stake of almost 5 per cent in Vivendi, which is the parent company of the Universal Music Group, the Canal Group, Maroc Telecom, SFR and Vivendi Games. The company recently posted first quarter earnings of EURO 23 million - an increase of 109 per cent over the same period last year - and raised its forecast for the rest of 2006.