Messier Steps Down from Vivendi Universal as Shares Fall
The same day Chairman Jean-Marie Messier tearfully stepped down after watching the stock drop 60 percent over the past year, a report about accounting irregularities surfaced in France - an account Vivendi Universal flatly denied.
As a result, shares plummeted another $4.69, or 21 percent, to close at $17.76.
The struggling company also was downgraded by both Moody's Investors Service and Standard & Poor's to just a notch above junk status because both firms were worried that massive debt payments might not be met in the next six months.
In addition, Moody's said it may cut the ratings on Vivendi Environnement SA, Vivendi's water company division, amid the current "uncertainty."
Even Vivendi Universal Entertainment Chairman Barry Diller, who seemed impervious as he refused to accept any stock - only cash - for his transaction for USA Studios last December, was miffed that shares in his USA Interactive tumbled 6.6 percent because of concerns about Vivendi Universal taking on more debt.
Other Vivendi Universal assets under Diller's watch also suffered, including Hotel Reservations Network (down $3.04 to $39), Expedia Inc. (down $5.41 to $52) and Ticketmaster (down 95 cents to $16.88).
Diller is positioned to make a run for some of the assets. But he has denied any plans to buy up the film or music divisions.
"I see no sign of that," said one Vivendi Universal executive. "Barry says it's not true and there's a board and they'll decide what they want to do."
Messier, 45, wrote a heartfelt apology to employees, saying he might have made a mistake going "too far too fast" in making acquisitions.
But he had no comment for the American media. In brief statements to French newspapers he fretted that "predators" were prowling to buy up the Vivendi Universal assets.
Messier won't officially be replaced by Aventis chief Jean-Rene Fourtou until a board meeting today, to be chaired by Edgar Bronfman Jr.
Bronfman's name has been raised as a possible replacement chairman. But sources close to Bronfman said he has no interest in assuming that job. His family owns 5.05 percent of the stock, a stake whose worth has fallen by nearly $2 billion in the last few months.
But Messier's initial impulse to fight for his position faded to acceptance yesterday as he realized that his position was essentially terminated.