Oil magnate Marvin Davis learned Thursday that he isn't holding the cards in his high-stakes bid to win control of Vivendi Universal's entertainment properties.
Vivendi's chief executive, Jean-Rene Fourtou, called Davis' bluff, refusing to give the Los Angeles billionaire exclusive negotiating rights for the entertainment and theme park assets. In a recent letter, Davis had threatened to withdraw his $13-billion offer for a controlling interest in those properties unless his demand was met this week.
"People who are nothing more than interested parties can be very noisy," Fourtou said, without naming names.
During a conference call with analysts after a Vivendi board meeting in Paris, Fourtou said he was weighing a variety of options for the future of the company's operations, and would not be pressured into a quick decision.
"He's very talkative," he said when asked about Davis' seeming ultimatum. "I'm not, on the subject."
Davis declined to comment. But sources familiar with the buyout negotiations said the 77-year-old former owner of 20th Century Fox will keep his investment group's offer on the table even if Fourtou continues to court others. They noted that Davis' letter posed simply the possibility of an immediate withdrawal of the bid.
In fact, Davis was encouraged by Fourtou's willingness to consider bids by all comers, the sources insisted. "He's hopeful that the talks will continue," one source said. "It's not over yet."
Fourtou's curt remarks came as Vivendi reported a $25.5-billion loss for last year -- the largest loss in French corporate history. Still, the results paled in comparison with AOL Time Warner Inc.'s $99-billion loss for 2002.
The bleak numbers reflected $20 billion in goodwill charges that underscored the steep decline in the value of the company's U.S. and French media holdings. They were amassed during a three-year spending spree that transformed Vivendi Universal into the world's second-largest media conglomerate.
Despite the hefty loss, Fourtou vowed that the company would return to profitability this year and touted its "major achievements." Among them: reducing debt from $38 billion to $13 billion and recording an 18% increase in operating income, driven by French telecom company Cegetel.
Vivendi Universal Entertainment, which includes Universal Studios, reported a 6% gain in operating income. Strong video sales helped offset higher television advertising costs and reduced theme park income.
The most troubled division remained Universal Music Group, which posted a 23% decline in operating income amid an industrywide slump.
To further shave debt, Fourtou on Thursday vowed to sell about $7 billion in assets this year. How much of that may come from the firm's entertainment units remains unclear.
"What are we going to dispose, how much and to whom -- I won't answer that question," Fourtou said. "I am in contact with everybody."
He said one of those was Viacom Inc. Chief Executive Sumner Redstone, whom he met in Los Angeles last week. "But he's not the only person I've been seeing," Fourtou said.
Like most suitors, Viacom has expressed an interest in only Universal's cable channels. Other potential bidders, such as Liberty Media Corp., News Corp. and mogul Barry Diller, seem to be increasingly less keen on the company's operations.
Investors remained wary about Vivendi's direction. Company shares Thursday fell 71 cents, or 5%, to $13.56 on the New York Stock Exchange.
"Nobody knows what Vivendi is going to be," said New York money manager Dennis Leibowitz, who follows the company. "It's a big question."