Vivendi may sell AOL Stake for $700 Million
  03/05/2001 8:57:59 PM MST Albuquerque, Nm
  By Dustin D. Brand; Owner AMO

Vivendi to sell it's AOL stake?   A source close to the French media group says the group has agreed to the sale in principle, but needs shareholder approval.

  From LONDON, Vivendi Universal (V) (EAUG.PA) has agreed in principle to sell its stake in AOL France back to AOL Time (AOL) Warner (AOL.N) for $700 million, a person close to the French media group said on Monday.

  However, shareholders in Vivendi's telecoms arm Cegetel, which owns part of the 55 percent stake in AOL France, must still rubber stamp the agreement before it can be announced, the source said.

  "The agreements have been finalized but they are now in the hands of Cegetel's shareholders and there should be a result within two weeks," the source said. Vivendi owns 44 percent of Cegetel, whose other shareholders include BT (BT.L), Vodafone (VOD.L) and SBC Communications (SBC) (SBC.N).

  Vivendi Universal decided to sell its AOL France stake last year after talks over swapping the holding for a share in AOL Europe fell apart. The stake is held through Vivendi's Cegetel and Canal Plus units.

  Vivendi Universal CEO Jean-Marie Messier, attending an FT media conference in London, declined to comment on the stake sale. Messier said last Thursday the sale could take place in the next few days or even hours.

  AOL Time Warner had little to add.

  "There is no deal to announce at this time and any discussion of terms would be speculative," said an AOL Time Warner spokesman in New York.

  However, the source said AOL Time Warner had already agreed to pay cash or shares for the AOL France stake over a period of two to three years.

  In a similar deal last year, AOL agreed to buy German media group Bertelsmann's (BTGGga.F) half of AOL Europe for $8.25 billion to be paid in cash or shares after January 31, 2002.

  Vivendi agreed to buy a 55 percent stake in AOL France in June 1998, with Cegetel taking 36.7 percent and Canal Plus 18.3 percent. While financial details of the deal were not given at the time, Messier said last week he expected to make a "significant" capital gain from the sale.

  Vivendi Universal had wanted to swap its stake in AOL France for AOL Europe to tap a wider subscriber base.

  Vivendi Universal, the result of last year's merger between Vivendi, Seagram and Canal Plus, has now set up its own Internet portal, Vizzavi, with mobile telephone operator Vodafone.

  Vivendi Universal shares ended 1.34 percent higher at 67.90 euros.

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