Investors hoping for a conclusion to the four-month auction of Vivendi
Universal S.A.'s U.S. entertainment assets were disappointed Tuesday, after the
French conglomerate said it would continue to negotiate with General Electric
Co. and a group headed by former Vivendi vice chairman Edgar Bronfman Jr.
In a statement issued Tuesday, Vivendi said its board of directors, meeting
in Paris to discuss the bids, 'has decided to enter into further negotiations
with the two strongest bidders,' later identifying GE's NBC television unit and
Vivendi officially put its Vivendi Universal Entertainment assets on the
block in April.
Initially, at least six potential bidders had emerged for VUE, which consists
of cable channels USA Network, Sci-Fi Channel, Trio and NewsWorld International,
the Universal movie studio and Universal theme parks.
But that field quickly dwindled as the auction process dragged on.
First to drop out was oil billionaire Marvin Davis, whose bid was deemed to
low. In July, Metro-Goldwyn Mayer Inc. took itself out of the running, claiming
Vivendi's asking price was too high.
Earlier this month Comcast Corp. - which was not an official bidder for the
assets - said it would not bid on VUE but would work with Vivendi to develop new
And Monday night, Liberty Media Corp. pulled the plug on its VUE bid, stating
that 'the synergy opportunities with our other businesses are not sufficient to
support the expected transaction value.'
Viacom Inc was said to be interested in VUE's cable channels, but did not
submit a bid.
In recent weeks the company has said that it would not pursue the assets
GE has long been thought to be the front-runner for VUE, and would create a
separate entity including its NBC broadcast network, cable channels CNBC,
Telemundo, MSNBC and Bravo with the VUE assets.
While the GE bid included no upfront cash initially, Vivendi would receive a
minority interest in the joint venture that it could cash out over time.
Bronfman's bid reportedly included the most upfront cash -- $8 billion - and
was worth about $13 billion in total, according to several published
Bronfman's group includes private equity investors the Blackstone Group and
Thomas H. Lee Partners, and Cablevision Systems Corp.
Cablevision was expected to contribute its Rainbow Media Holdings Inc.
national programming assets to the bid, not cash.
no details on the bids in its press release, but said the two offers
included 'industrial and financial aspects (debt deconsolidation and cash or
Vivendi also kept the door open for an initial public offering for VUE,
adding that it is investigating an IPO 'which would take place after the
implementation of strategic alliances aimed at strengthening its television
of those strategic alliances would likely include the one being worked on with
Comcast, involving existing cable channels and new channels and