Click here for a special offer. Click here for our free newsletter. A French telecommunications company with a background in waste management takes over a Hollywood entertainment giant in the land where waste was practically invented. But Vivendi's shares were down 23 percent on the news of the deal. Shares in Vivendi-controlled Canal Plus were off 12 percent, and Seagram's stock had fallen more than 8 percent, as investors began to get jittery about the cost of the merger and just how it would work.
Analysts chalk up much of the bad reaction to a basic lack of communication.
But you could not have designed a worse way to launch a company. The presentation was hastily put together, short on data, and gave almost no clues as to how the vaunted synergies would work. Moreover, American stock analysts say that many international stock analysts are inexperienced at evaluating highly complex media companies and simply misunderstood the deal. Messier and Seagram CEO Edgar Bronfman Jr. shrugged off the drop in share prices. By week's end, as more information trickled out, shares in all three companies had started the slow climb back.