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07-15-2003, 11:03 AM
DILLER THRILLER
By TIM ARANGO
July 15, 2003 -- Barry Diller is talking with longtime arch-enemy Sumner Redstone about teaming up to acquire Vivendi Universal, The Post has learned.
Under a plan being discussed, Viacom would get the only VUE assets it has expressed interest in - the cable networks USA, Sci-Fi and Trio.
Diller would be able to liquidate his VUE holdings. Diller owns roughly $2 billion worth of preferred stock in VUE that doesn't come due for about 20 years.
Under terms that have been discussed, Viacom would purchase all of VUE, and then spin off the movie studio and theme parks into a private company controlled by Diller - a complicated transaction that would minimize the tax liability that would result from breaking up VUE, according to a source familiar with the plan.
Diller then would eventually spin off the studio by either selling it outright or taking it public, according to a source.
Diller is aggressively trying to angle his way back into the Vivendi auction, and is expected to talk to others as well.
Diller has been barred from participating directly in the bidding process, because Vivendi has held him to a standstill agreement stemming from his 2001 sale of USA Networks to Vivendi.
But a source close to Vivendi indicated yesterday that Vivendi, if asked, would release Diller from the standstill agreement and allow him to partner with Viacom.
Another scenario considered plausible is for Diller to partner with General Electric's NBC.
Sources close to NBC said the company is open to discussing partnerships.
A spokesperson for Viacom declined comment. A spokesman for Diller's InterActiveCorp said Diller was not part of any bidding group, but would look at any opportunity that would allow him to cash out his VUE holdings.
Diller and Redstone waged a contentious battle for control of Paramount Communications about 10 years ago. Any deal between the two would suggest they have finally buried the hatchet.
Any partnerships for VUE would have to address complicated tax issues.
Vivendi sources say the company has no plans to break up the assets and sell them piecemeal, because doing so would trigger a more than $1 billion payment to Diller to cover taxes.
But the assets could be broken up after Vivendi sells them as a whole, if the parties can work out the tax issues - a scenario that one media investor said recently is now the most likely possibility.
Speaking last week at the annual Allen & Co. conference in Sun Valley, Idaho, this person said, "The biggest surprise here is the way the Vivendi thing is shaping up. I think it could be broken up. I thought Liberty [is] more interested than they were before."
"It's more and more obvious that Barry will play a key role," said the source.
A final decision could come by September.
By TIM ARANGO
July 15, 2003 -- Barry Diller is talking with longtime arch-enemy Sumner Redstone about teaming up to acquire Vivendi Universal, The Post has learned.
Under a plan being discussed, Viacom would get the only VUE assets it has expressed interest in - the cable networks USA, Sci-Fi and Trio.
Diller would be able to liquidate his VUE holdings. Diller owns roughly $2 billion worth of preferred stock in VUE that doesn't come due for about 20 years.
Under terms that have been discussed, Viacom would purchase all of VUE, and then spin off the movie studio and theme parks into a private company controlled by Diller - a complicated transaction that would minimize the tax liability that would result from breaking up VUE, according to a source familiar with the plan.
Diller then would eventually spin off the studio by either selling it outright or taking it public, according to a source.
Diller is aggressively trying to angle his way back into the Vivendi auction, and is expected to talk to others as well.
Diller has been barred from participating directly in the bidding process, because Vivendi has held him to a standstill agreement stemming from his 2001 sale of USA Networks to Vivendi.
But a source close to Vivendi indicated yesterday that Vivendi, if asked, would release Diller from the standstill agreement and allow him to partner with Viacom.
Another scenario considered plausible is for Diller to partner with General Electric's NBC.
Sources close to NBC said the company is open to discussing partnerships.
A spokesperson for Viacom declined comment. A spokesman for Diller's InterActiveCorp said Diller was not part of any bidding group, but would look at any opportunity that would allow him to cash out his VUE holdings.
Diller and Redstone waged a contentious battle for control of Paramount Communications about 10 years ago. Any deal between the two would suggest they have finally buried the hatchet.
Any partnerships for VUE would have to address complicated tax issues.
Vivendi sources say the company has no plans to break up the assets and sell them piecemeal, because doing so would trigger a more than $1 billion payment to Diller to cover taxes.
But the assets could be broken up after Vivendi sells them as a whole, if the parties can work out the tax issues - a scenario that one media investor said recently is now the most likely possibility.
Speaking last week at the annual Allen & Co. conference in Sun Valley, Idaho, this person said, "The biggest surprise here is the way the Vivendi thing is shaping up. I think it could be broken up. I thought Liberty [is] more interested than they were before."
"It's more and more obvious that Barry will play a key role," said the source.
A final decision could come by September.