Vivendi Universal SA, trying to sell its US entertainment assets for US$14 billion to cut debt that almost drove it into default, may narrow the list of bidders to two or three from the current four at a board meeting today, people familiar with the matter said.
The four are General Electric's (GE) NBC; a group led by Edgar Bronfman Jr; John Malone's Liberty Media Corporation; and Viacom Inc.
NBC has proposed joint ownership, people familiar with the network's plan said July 30. Vivendi's board meets today in Paris to study the offers, said people familiar with the company, who declined to be identified.
``Vivendi is nearing a decision,'' said Laurent Vallee, who helps manage US$700 million at Richelieu Finance in Paris and has avoided Vivendi stock.
``The Bronfman and NBC offers seem the most solid, though I wouldn't rule out Liberty Media,'' he said.
Vivendi came close to default a year ago and put the movie and television assets up for sale in April to help meet Chief Executive Officer Jean-Rene Fourtou's pledge to return the company's debt to investment grade. Vivendi has since sold 1.35 billion euros (US$1.5 billion) of bonds and changed terms on another bond to avoid payments due in the next 18 months.
The entertainment division includes the Universal film studios, cable-television networks including USA and Sci Fi, a producer of television programs such as Law & Order, and theme parks.
Fourtou joined Vivendi a year ago after a US$77 billion acquisition spree by his predecessor, Jean-Marie Messier, brought the company close to bankruptcy.
Viacom, the third-largest US media company, is interested only in Vivendi's cable channels, president Mel Karmazin said last week, reiterating comments by chairman Sumner Redstone. Vivendi wants to sell the entertainment unit as a whole to avoid paying as much as US$2 billion for taxes that Barry Diller's InterActiveCorp would owe after a partial sale, according to a filing with the US Securities and Exchange Commission by USA Interactive, which is run by Diller.
Diller, who resigned as co-chief executive of Vivendi's US media unit in March, had in 2002 sold his cable-TV and production businesses to Vivendi for US$10.3 billion.
Vivendi plans to cut debt below 10 billion euros this year, from 13.6 billion euros as of June 30.
NBC proposed a transaction where its parent, GE, would own a controlling stake in a venture and Vivendi a minority stake.
``As pressure eases on its liquidity, Vivendi may go for the highest offer in total, rather than the offer with the highest part of cash,'' said Julien Raffelsbauer, a credit analyst at Banc of America Securities in London. ``In that context, the GE offer makes sense.''
General Electric sent Vivendi a letter Saturday detailing plans to merge NBC and some of its other units with Vivendi's film and television assets, the Wall Street Journal reported on its Web site.
The letter follows discussions between the companies regarding how the merger would work and the terms under which Vivendi could sell its stake in a combined company, the newspaper said.
GE wants to acquire Vivendi's entertainment assets by merging them with its cable and television businesses into a company in which Vivendi would own a minority stake, the Journal said.
The letter outlines a way in which Vivendi can sell its stake in intervals and raise cash against a future commitment by General Electric to buy part of its stake, the Journal said.
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