'Financial Times': Seagram's Bronfman Says Deal with Vivendi Near
DAVID HAFFENREFFER, CNN ANCHOR: And we are seeing a bit of a turn around for the European major indices overseas now, with two of the four trading with declines at this hour. Vivendi seems to be several steps closer to wrapping up a takeover for Seagram. Lionel Barber, of the "Financial Times," joins me now from the "FT"'s London newsroom. Good morning, Lionel. What's the latest on this front?</s>LIONEL BARBER, NEWS EDITOR, "FINANCIAL TIMES": Well, I think Mr. Messier, who's the head of Vivendi, hopes to wrap this deal up in the next few days. The news is that the share price of Vivendi is not responding very favorably. And I think there's some questions about whether he's overpaying for Seagram, $35 billion, around that price tag. On the other hand, Vivendi is saying: We're going to get a good price for Seagram's drinks. So it will all be right on the night.</s>HAFFENREFFER: But isn't that standard, that the acquirer's shares generally do head lower or is it more of a pronounced decline?</s>BARBER: It's fairly strong. I mean, I think, really, it's what people are saying in the market. You're right, on big acquirers, often the shares do go down. But this is a big price tag, and remember, it's the price tag that Rupert Murdoch really wasn't prepared to countenance earlier this year in looking at Seagram.</s>HAFFENREFFER: Got a question for you coming off your front page of your edition today that the financial services industry in Europe is coming under a bit of scrutiny by lawmakers there.</s>BARBER: I think this is a very big story that we've put on our front page in the "Financial Times" today in the international editions. This is a new initiative to appoint a special group of experts, led by a man called Alexander Lampulusy (ph), who is really one of the architects of European single currency. So look at the financial services regulation in Europe. It think that there is the potential now to create new rules which will be governing some of these big mergers of banks and insurance companies. Also the potential for a new super regulator in Europe to take over some of the responsibilities for looking at systemic risk in the banking sector in the Eurozone. I think one of the reasons you're getting this change is just the simple competitive impact of the euro, globalization making cross- boarder merger activity in Europe much, much greater than it has been in the past, in a sense that you need a new rules-based system, which is really comprehensive to encompass that.</s>HAFFENREFFER: Would this also include cross-sector mergers like between banking and insurance companies as well?</s>BARBER: Well, I spoke to Mr. Lampulusy (ph) earlier this year about this, when he was sounding out governments. And I think that's certainly on his mind. If you look at, for example, the potential in France and in Germany for that kind of cross-sector activity, we don't have any rules to govern this. We don't have any sense of, well, if they merged to that, say one of these big investment banks from the States, Goldman or Morgan, put two big entities together, well, how is it going to work? what are the risks involved? and what about a kind of single-regulatory framework? We don't have that at the moment.</s>HAFFENREFFER: Interesting topic. Lionel Barber, of the "Financial Times," thanks for joining us this morning.