Jean-Marie Messier, the embattled head of the Franco-American media and utilities group, Vivendi Universal, has once again saved his job but not yet the company's share price or its credibility.
A nine-hour meeting of the Vivendi Universal board in New York on Wednesday night imposed new limits on Mr Messier's autonomy, setting up a committee under the chairmanship of a major shareholder, Edgar Bronfman Jr, to control policy on reducing more than €32bn of corporate debt.
The move is an embarrassing comedown for Mr Messier, who once boasted he did not have to answer to anyone. He will now answer to the very person he has attempted to sideline since Vivendi's mega-merger two years ago.
Mr Bronfman has been a particular critic of Mr Messier's strategy, having seen his investment slump 70 per cent since selling his family entertainment business to Vivendi in 2000. Mr Bronfman has since been linked to speculation about a possible split of the company.
But the markets were not impressed by the failure of the company to give details of what parts of the sprawling Vivendi empire – stretching from Universal Studios in Hollywood to French water utilities – might be sold to raise cash.
Reports in Paris suggest that Vivendi is ready to cede a stake of up to 20 per cent in its original business, Vivendi Environment, which grew from French water supply and sewage companies. The French government, has, however expressed reservations about which parts of this business it would be prepared to see sold to buyers outside France.
Without specific commitment on reduction of debt, the markets were disappointed in the outcome of what had been billed as a make-or-break meeting for Vivendi and Mr Messier. The group's share price, already 45 per cent down since the start of the year, continued to slide on stock markets yesterday, closing down more than 5 per cent.
After its meeting, the Vivendi Universal board said that it intended to "pursue actively a programme of debt-reduction and internal growth". The board said that it would not discuss initiatives to reduce debt until they had happened and announced the creation of a committee to control this aspect of company policy.
The new committee – nominally proposed by Mr Messier himself – was seen in Paris as a compromise between French and American board members. His sharpest critics on the board (mostly the American and Canadian members) had reportedly wanted even tighter restrictions on the activities of the French tycoon, who has been criticised for taking impulsive decisions without consultation.
Mr Bronfman represents the Canadian business family that sold out Universal Studios and other media businesses to Vivendi and still owns 5.3 per cent of Vivendi Universal capital. His co-president on the new committee will be Marc Viénot, former head of the French bank, Société Générale.
Overall, the creation of the committee was interpreted in Paris as a way of giving Mr Messier a final opportunity to prove the value of his policy of rapid expansion in the past two years. "The hour of truth has not yet come for Messier but it is coming closer," said one banker, quoted by the French newspaper, Le Monde.
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