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Wednesday, August 27, 2003

NBC in running for Vivendi unit
Bidders for entertainment assets cut to 2

By JAMEY KEATEN
THE ASSOCIATED PRESS

PARIS -- Vivendi Universal yesterday narrowed the field of bidders for its entertainment assets to two -- General Electric Co.'s NBC and an investor group led by former Seagram Co. Chief Executive Edgar Bronfman Jr.

After a four-hour board meeting, the French media and utilities conglomerate said it would enter separate, in-depth talks with the "two strongest" bidders. In either case, a deal would leave Vivendi a "substantial minority interest" in a U.S. media company, the company said.

The move excludes CBS and MTV owner Viacom Inc., which had expressed interest only in Vivendi's cable channels -- USA, Sci-Fi and Trio. The other assets for sale include the Universal movie and TV studios and several theme parks. Universal's music company had been for sale but was later taken off the block.

In its statement, Vivendi also said it was still exploring a public offering for Vivendi Universal Entertainment.

Vivendi has been hoping to sell the Hollywood assets for at least $14 billion and use the proceeds to pay down debt.

The field of what had been six potential bidders has dwindled. Liberty Media Corp. was the latest to leave, saying late Monday that the $14 billion asking price was more than it felt Vivendi's assets were worth to Liberty. The Colorado-based company has a 3.6 percent stake in Vivendi.

Comcast Corp., the largest U.S. cable TV provider, and Metro-Goldwyn-Mayer Inc. had also expressed interest in the assets but later 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.

NBC wants to merge Vivendi's entertainment assets with its own holdings. In addition to the network, NBC also has the CNBC and MSNBC cable channels and Telemundo, a Spanish-language broadcaster.

Access to Universal's studios would give NBC a ready source of programming. NBC, the only major network that is not part of a larger media conglomerate, has long been rumored to be on the lookout for a Hollywood studio. CBS is owned by Viacom, ABC is part of the Walt Disney Co., and Fox is part of News Corp.

Bronfman is leading a group of investors that include Thomas H. Lee Partners, a private equity fund, and Cablevision Systems Corp., a New York-based cable TV company that owns the cable channels AMC, the Independent Film Channel and WE: Women's Entertainment.

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