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Vivendi eyes make-or-break bids
LONDON, England (Reuters) -- Undeterred by a dwindling cast of contenders for its show business empire, Vivendi Universal is calling for a make-or-break round of bids in the next seven days, sources familiar with the auction said. Vivendi, the world's second biggest media group, is sticking by a $14 billion price tag for its Universal film, television and theme park business despite being snubbed by some bidders for asking too much, the sources said. In what is proving to be a tangled auction of billion-dollar brinkmanship, the French-American media group appears to have lost its two leading suitors after saying bids were way off the mark, undermining its efforts to whip up a heated battle. Hollywood's Metro-Goldwyn-Mayer turned on its heels last month and cable king John Malone's Liberty Media has also backed away, leaving General Electric's U.S. television network NBC as the current favoured contender. Most bidders have made clear they see $14 billion as a tall order but Vivendi still wants the remaining pool -- including NBC, Viacom and a team led by Edgar Bronfman Jr -- to present final proposals by next Monday, the sources said. "Binding bids are due in around August 18 and the bidders will be narrowed down to one or none by late August or early September,'' said one source familiar with the process. This round could determine whether Vivendi calls off the auction altogether and goes it alone down the flotation route. Vivendi has long said it could opt instead to sell 25-30 percent of Vivendi Universal Entertainment (VUE) on the market. However, some sources involved in the auction have said Vivendi Chief Executive Jean Rene Fourtou is also considering other options including selling just the cable television assets or holding out for late entrants such as Comcast Corp. "We're all in the dark and this auction isn't going well so in reality Vivendi has to consider everything,'' said one source. "I really can't see this latest deadline being final.'' CURRENT FAVOURITE: NBCVivendi, which has seen its empire shrink to a market value of $18 billion, is selling its U.S. entertainment assets including Universal Pictures in a drive to cut huge debts which threatened to topple the Paris-based company last year. However, the French-American group has now secured funds to keep it going into next year, making a flotation or a partnership with another big media player more viable options. Sources involved in the auction say Vivendi has been making headway with NBC over a joint venture that would create a media giant ranking among the world's biggest. Under the NBC proposal, Vivendi would merge VUE with NBC's stable of cable television networks -- ranging from CNBC to Bravo -- creating a new company controlled by NBC. Such a plan does not envisage up-front cash but it could be Vivendi's best shot at reaching its desired value, offering an option to monetise a minority stake at some point, sources say. Among the other bidders, sources involved in the auction said Bronfman, Vivendi's vice chairman, was working on a new bid, despite speculation he will struggle to raise his offer. Viacom chief Sumner Redstone, whose empire already includes Paramount Studios, told Reuters last month he would not aggressively pursue the auction and was still only interested in the TV assets. However, he remains a bidder all the same. Liberty, the original favourite, has effectively removed itself from the process, sources have said. But the Vivendi camp is optimistic Liberty will keep its hand in the auction. Vivendi remains hopeful that some bidders could form teams. But bidders are tiring of what has so far proved to be a confused auction. Some sources involved in the auction say they have not even been informed about the second-round deadline. "The bidders have been left to feel like there is not even a clear undertaking to sell the assets,'' said one source.
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