Aug 27, 2003 By Jamey Keaten Associated Press Writer 3 min read

PARIS (AP) – Vivendi Universal agreed Tuesday to enter separate, in-depth talks with General Electric Co.’s NBC unit and an investor group led by Edgar Bronfman Jr. over the sale of its entertainment assets. After a board meeting lasting more than four hours, Vivendi said it had narrowed a field of bidders to the “two strongest” offers. Three other bidders have already dropped out of the sale process.

Vivendi also said it would maintain a “substantial minority interest” in a United States-based media company.

Hoping to pare billions of dollars in debt, Vivendi wants to sell its Universal film and TV studios, cable channels and Universal theme parks for a minimum of $14 billion for the complete package. Those Hollywood assets have recently produced movies including “The Hulk” and “Seabiscuit.”

The field of bidders has dwindled. Liberty Media Corp. was the latest bidder to withdraw, saying late Monday that the $14 billion asking price was more than it felt Vivendi’s assets were worth. The Colorado-based firm, which has a 3.6 percent stake in Vivendi, offered no other details.

Asked whether Liberty’s withdrawal was a disappointment, Vivendi Chairman Jean-Rene Fourtou replied “not at all” as he walked past reporters into the company’s Paris headquarters, near the Arc de Triomphe, ahead of the board meeting.

Liberty’s withdrawal left the NBC unit and the group headed by Bronfman, a former Seagram Co. executive, as the leading contenders. NBC wants to merge Vivendi’s entertainment assets with its own holdings, but its offer has not included any cash. NBC sent a letter to Vivendi on Saturday providing more details about its proposal, a person with knowledge of the matter said. NBC wants to create a new company that would be controlled by GE and which would be 20 to 25 percent owned by Vivendi, according to the source, who spoke on condition of anonymity. Vivendi would be able to raise cash by selling some or all of its stake in the combined company.

Comcast Corp. and Metro-Goldwyn-Mayer Inc. had also previously expressed interest in the assets, but withdrew.

Comcast did not say why it was pulling out, but MGM’s bid of $11.5 billion was well below the minimum Vivendi executives said they would insist on for the assets.

Viacom Inc., owner of CBS and MTV, has expressed interest only in Vivendi’s cable channels.

Vivendi has been trying to sell assets to pay off huge debt, estimated at the end of last month at more than $13 billion.

Last month, Vivendi said second-quarter revenue declined 60 percent to euro6.13 billion ($6.89 billion) from a year ago, with TV production and music businesses contributing to the drop.

Chairman Fourtou has pursued a fire sale of assets that included Vivendi’s publishing arm, Internet holdings and art works in an effort to turn the company around after it piled up the debt in a buyout spree in the late 1990s.

Fourtou hopes to build the new company around its telecoms arm, SFR-Cegetel, which reported a 6 percent revenue increase in the second quarter to euro1.83 billion ($2.06 billion).