HITS Daily Double


Company Asks Paris Court to Annul Voting Results

Vivendi Universal said that it would ask a Paris court to annul the voting results of its shareholder meeting last Wednesday.

If the court agrees, the Vivendi board would then schedule a new shareholder meeting to vote again on management resolutions that were unexpectedly rejected last week — one of them a plan to set aside 5% of the company's shares for stock options to senior managers, according to the New York Times.

The jousting with shareholders by Vivendi's embattled chief executive, Jean-Marie Messier, is a reflection of some of the broader challenges facing his company. One challenge is the fact that Messier's original vision of delivering media from the vast Universal music and video libraries to mobile telephones and other wireless devices has largely failed to materialize.

Now, it appears that the company might abandon that plan altogether. A person close to Vivendi's board told the Times yesterday that at their meeting last Wednesday, the company's directors openly discussed the possibility of ending Vivendi's money-losing wireless media venture, known as Vizzavi.

No matter Vizzavi's fate, and despite the turmoil engulfing Messier personally, Vivendi Universal is hardly a company on the brink of collapse, the Times said. The company reported first-quarter revenue and earnings figures for the entire company, using United States accounting standards for the first time.

The company posted record losses of 17 billion euros ($15.36 billion), or 16.52 euros a share, was a result of a one-time noncash charge of 17 billion euros, which reflected a recent change in United States accounting standards. The accounting shift changes the way that companies account for acquisitions that turn out to have been overvalued. The same accounting change prompted AOL Time Warner, the world's No. 1 media company, to record a $54 billion charge recently.

Revenue, however, was up 16.5 percent from last year's first quarter. And excluding a big write-down made necessary by a change in American accounting standards, Vivendi reported first-quarter earnings of 51 million euros ($46.08 million), or 0.05 euro a share, up from a loss of 0.14 euro in the period last year.

Even though today's financial report was Vivendi's most extensive financial disclosure yet under United States accounting standards, Vivendi still has not reported consolidated balance sheet and cash-flow statements under those standards. Such statements will be critical for serious investors looking to develop a detailed understanding of Vivendi's financial position. The company said that it would report full financial statements under United States accounting by the end of May.