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Tuesday, 2 July, 2002, 10:49 GMT 11:49 UK
What went wrong at Vivendi?
Jean-Marie Messier has been ousted from the top spot at France's media giant Vivendi Universal.

Yet he was once heralded as a business genius. BBC News Online finds out where it all went wrong.

Why did shareholders and directors want to get rid of Jean-Marie Messier?

The main reason is a financial one.

Vivendi is now worth less than one fifth of what it was two years ago.

During that time, shareholders have watched the value of their investments drop from $120 a share to about $20 a share.

At the same time, debt has risen sharply and questions have been asked about the wisdom of Mr Messier's attempts to transform the company.

But there are also more personal reasons.

Mr Messier's brash leadership style and his championing of an American-style attitude to business did not go down well with some of the more traditional elements in France's business community.

He was perceived as being arrogant to the point of damaging the company and was accused of treating the company as a personal fiefdom.

And Mr Messier's sacking of Canal Plus' popular chief, Pierre Lescure, increased public dislike of him.

So why was he once such a hero?

Mr Messier is a visionary business leader.

He transformed a French sewage utility into a global media and telecommunications giant, second only to AOL Time Warner.

From 1996 onwards, he launched a round of aggressive business acquisitions including TV and film company Canal Plus, online music firm and educational publisher Houghton Mifflin.

He also stepped across the Atlantic to snap up Hollywood's Universal Studios and Universal Music Group from Canada-based Seagram.

New business launches included Vizzavi, the mobile internet portal owned jointly with Vodafone.

During the expansion period, Vivendi's stock more than doubled to almost $300 a share at the beginning of 1999.

Where did the vision go wrong?

Mr Messier seemed to have bitten off more than he could chew.

The series of takeovers left the company with a large debt pile.

Then, the hi-tech bubble burst and economic growth began to falter.

That meant that many of the businesses that Vivendi bought were only worth a fraction of the value the firm paid for them.

Vivendi Universal unveiled a 13.6bn euro loss for 2001, weighed down by a colossal downward revision in the value of its assets.

Will a new chief fix Vivendi's problems?

The prospect of Mr Messier's departure boosted the ailing share price on Monday.

But analysts also say there is little cohesion and synergies in the huge empire that Mr Messier put together.

And some say the company would be worth more if it was split back into chunks.

That may include spinning-off the original water and refuse business, called Vivendi Environnement.

And there are also rumours that American shareholders are plotting to buy back the US parts of the business.

Vivendi's cash shortage means that the firm would gain some short-term manoeuvring space by reducing the debt burden.

"I am quitting so that Vivendi Universal may remain," Jean-Marie Messier said.

But it is looking increasingly unlikely that the firm will indeed survive intact.

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