Vivendi relinquishes its £1.7bn of BSkyB shares

Media giant Vivendi Universal have taken the first step in divesting itself of a £1.7 billion stake in digital broadcaster BSkyB.
The news was not a total surprise for the market which had been anticipating a move of this kind since Friday. However that did not soften an early blow to BSkyB shares which dropped 5% during early trading on Tuesday morning. The corporation recovered strongly later in the day.
As part of a bookbuilding exercise, Goldman Sachs and Deutsche Bank have swapped bonds to the value to the 400 millions shares owned by Vivendi and they shall take the lead in the sale. In this way Vivendi are stressing that they are not directly selling the shares.
Goldman Sachs and Deutsche Bank are now in the process of selling off the shares, which amount to about 13% of the company.
"It’s the remaining shares underlying the equity swap entered into between Vivendi Universal and Deutsche Bank in October last year (on sale). It’s basically a complete clearing of the overhang left," said a source close to the deal.
This latest news for BSkyB follows some mixed signals over the past few days. In addition to the manoeuvring by Vivendi, the corporation also announced a loss nearly £1.3 billion during their third quarter results, mainly because of the collapse of the German company KirchPayTV, in which it had a large stake.
Sky was also owed £22 million by ITV Digital which had to be written off when the company was declared insolvent. The early dip in the BSkyB share price may also have been influenced by worries that the UK government could tax satellite dish ownership.
Vivendi's investors have broadly welcomed the deal as a way of raising cash to help whittle down the company's €60 billion debt pile.
Vivendi Universal, www.vivendiuniversal.co.uk
(GMcG)