Vivendi 'to wipe out billions'

Fourtou: Preparing a strategy to sell Vivendi assets and cut debt

PARIS, France -- Vivendi Universal, the world's second-biggest media company, may slash the value of assets by several billion euros when it reports first-half earnings on Wednesday, according to a report.

Shares in the troubled Franco-American media giant, which is under new management and pressure to reduce its debt pile, fell 3.7 percent to 16.37 euros in early Paris trading on Monday.

"Half-year accounts cannot be presented without putting the clock back to zero for certain holdings, all the more so since the value of its assets as a whole has declined," French newspaper La Tribune quoted a source close to one of Vivendi's board members as saying.

Vivendi could devalue its Internet assets by about 400-500 million euros and USA Networks by 1.5 billion euros, one analysts told the paper, although another said USA Networks could be devalued by as much as 3 billion euros, taking the total write-down to between 3-5 billion euros.

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New Chief Executive Jean-Rene Fourtou has pledged to reduce the company's debt mountain of 19 billion euros, possibly by selling assets not critical to Vivendi's main business focus. That could include its video games unit, the Wall Street Journal said last week. (Full story).

Former Vivendi chairman and chief executive Jean-Marie Messier spent billions on building up the empire to challenge the world's biggest media group, AOL Time Warner, which is the parent of CNN.

Acquisitions included a $30 billion buyout of Canada's Seagram and a $10.3 billion purchase of USA Networks Inc., a cable and entertainment company run by Hollywood mogul Barry Diller.

Vivendi's stock came under pressure last Friday after Italian daily La Repubblica said Rupert Murdoch's News Corp is only prepared to pay 1.28 billion euros fir Italian pay TV operator Telepiu, below the 1.5 billion euro price agreed with the Vivendi.