Vivendi to buy €1 billion of high-yield notes

New York, May 25 - Vivendi Universal said it launched a tender offer to buy up to €1 billion equivalent principal amount of its euro-denominated 9½% senior notes due 2010, dollar-denominated 9¼% senior notes due 2010, and its dollar- and euro-denominated 6¼% notes due 2008.

It is also soliciting noteholder consents to amendments to, and waivers under, the indentures governing the four series of notes that would eliminate substantially all of the restrictive covenants, certain events of default and related provisions.

Vivendi, a Paris-based diversified media company, sold $935 million of the 9¼% notes and €325 million of the 9½% notes in an offering that priced on April 4, 2003 and sold $975 million of the dollar-denominated 6¼% notes and €500 million of the euro-denominated 6¼% notes, in an offering that priced on July 2, 2003. The company estimates the total principal amount of the four issues currently outstanding and subject to the tender offer at €2.4 billion.

Vivendi set a consent deadline of 5 p.m. ET on June 8 and said that the tender offer would expire at midnight ET on June 24, with both deadlines subject to possible extension.

Vivendi said it would rank the notes tendered in an order of priority, ranging from one to four; all notes having a higher acceptance priority level will be accepted for purchase before any tendered notes having a lower acceptance priority level are accepted.

Since the total cash consideration in the offer is limited to €1 billion, notes that are validly tendered and not withdrawn on or before the expiration deadline may be subject to pro ration, should the total principal amount tendered exceed the maximum tender amount.

The top priority will be the $935 million of outstanding dollar-denominated 9¼% senior notes due 2010; it is offering tender consideration for the notes of $1,140 per $1,000 principal amount of notes tendered and accepted for purchase plus a $30 per $1,000 principal amount consent payment for holders tendering their notes and delivering consents by the consent deadline.

The second priority will be the $975 million of outstanding dollar-denominated 6¼% senior notes due 2008; it is offering tender consideration of $1,015 per $1,000 principal amount plus the $30 per $1,000 principal amount consent payment.

The third priority will be the €325 million of outstanding euro-denominated 9½% senior notes due 2010; it is offering tender consideration of €1,160 per €1,000 principal amount plus a €30 per €1,000 principal amount consent payment.

The fourth priority will be the €500 million of outstanding euro-denominated 6¼% senior notes due 2008; it is offering tender consideration of €1,042.50 per €1,000 principal amount plus a €30 per €1,000 principal amount consent payment.

Vivendi will also pay accrued and unpaid interest on all tendered notes accepted for payment. Interest will be calculated up to, but not including, the settlement date for the tender offer, which will be promptly following the expiration date.

The offer is not conditioned on any minimum amount of notes being tendered.

The consent payment is not conditioned upon the adoption of the proposed indenture amendments, and the tender offer is not conditioned upon the receipt of the required consents.

Adoption of the proposed amendments requires the consent of at least a majority of the holders of the outstanding 2010 notes, as a class, or the 2008 notes, as a class.

The proposed amendments to the notes' indentures will not become operative if Vivendi does not have sufficient funds to purchase all such 2010 notes or 2008 notes that are validly tendered.

The 9¼% dollar notes due 2010 and the 9½% euro-denominated notes due 2010 vote together as a class for purposes of adopting the proposed amendments, as do the 6¼% dollar- and euro-denominated notes due 2008.

If the proposed amendments are adopted for a class of notes and all notes of that series that are validly tendered and not withdrawn are purchased under the rules of the tender offer, all remaining notes of a particular series that will remain outstanding will be subject to the terms of the applicable indenture, as modified by the applicable supplemental indenture.

Holders who validly tender notes may withdraw such notes at any time before the consent deadline, after which the tenders may no longer be withdrawn. Holders delivering consents to the proposed indenture changes may revoke their consents at any time before the supplemental indenture relating to the series of notes becomes effective. However, if a consent is revoked, the holder will not be eligible to receive the consent payment for those notes. Any valid revocation of a consent on or before the consent deadline will be deemed a withdrawal of the related notes.

The dealer managers for the offer will be Banc of America Securities LLC (call 212 847-5834 or 888 292-7000) and J.P. Morgan Securities Inc. (call 212 834-4802 or +44 (0)207-7742-750 or 866 834-4666). The information agent is Global Bondholder Services Corp. (call +44 (0)20-7864-9136; or for banks and brokers, 212 430-3774 or at 866-470-4500).

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