Mr. Messier attributed the market's reaction to "classical arbitrage" and said it was a great time to buy Vivendi stock.

Seagram shareholders will get 0.8 share of Vivendi stock if Vivendi's share price is less than $96.69.

The price, however, will be influenced by the price of Vivendi stock, which trades in Paris, and by foreign-exchange rates.

Vivendi stock, which trades on the Paris exchange, is now at 14.18 euros.

Vivendi stock surged today after The Wall Street Journal reported Mr. Davis's interest.

Under today's deal, Richemont agreed to hold its newly acquired Vivendi stock for one year.

Those who sold their Vivendi stock say they never bought Mr. Messier's vision of melding distribution and content in the first place.

As a result, both banks wound up with large chunks of Vivendi stock on their books.

But Vivendi stock, which has soared over the last year, began falling from its high of $136 in March and has continued to fall since news of the deal, closing yesterday at $92.25.

What worries analysts is that Vivendi stock has more than tripled since the beginning of 1998 until March 10, when it peaked at $136.50.