Vivendi Replaces Pay-TV Chief

Vivendi Universal on Thursday replaced the head of its Canal Plus Group and abandoned plans for a public stock offering of the troubled pay-TV company, putting added pressure on chief Jean-Rene Fourtou to raise cash by selling other assets, including some of its U.S. entertainment holdings.

As expected, Vivendi named Bertrand Meheut, the No. 2 executive at Canal Plus, to replace Xavier Couture with a mandate to overhaul Europe’s largest pay-television company, which has been losing money for years.

Even so, Vivendi Chief Executive Fourtou assured Canal Plus employees in an open letter that the company is “not up for sale.... The debt reduction that is indispensable for Vivendi Universal will be brought about by the disposal of other assets.”

In July, Fourtou announced plans for a public offering of the French Canal Plus, known for its sports programming and political satire, in a bid to raise at least $2 billion to reduce Vivendi’s crippling debts.

But management turmoil and protests over planned job cuts made a public offering all but impossible.

Now Fourtou will have to look elsewhere to make up the cash shortfall if he is to meet his target of raising about $7 billion from asset sales this year to restore Vivendi’s financial health.

Scrapping the IPO puts more pressure on Fourtou to sell some or all of the U.S. entertainment businesses, which include Universal Studios, and could give leverage to prospective buyers, said Dennis Leibowitz, a New York money manager.

“There are a lot of people interested in the [Vivendi Universal Entertainment] assets,” Leibowitz said.

Those include billionaire oil tycoon Marvin Davis, who has offered to buy the entire group, Liberty Media Corp. and General Electric Co.’s NBC.

Underscoring Vivendi’s tight finances, Vivendi is preparing for a nearly $1-billion bond sale to help refinance a $1.6-billion bridge loan for the company’s Vivendi Universal Entertainment partnership, a source close to the company said.