ENTERTAINMENT 2 remain contenders in Vivendi assets bid

NBC would receive a source of programming in the deal.
PARIS (AP) -- And then there were two.
Thinning out a pack of bidders, Vivendi Universal chose General Electric Co.'s NBC and an investor group led by former Seagram Co. chief executive Edgar Bronfman Jr. as the remaining two contenders for its prized entertainment assets.
The French media and utility company wrapped up a four-hour board meeting with word that it would continue talks with the two "strongest bidders" -- bumping CBS and MTV owner Viacom Inc. from the race.
The move, announced in a statement, also meant that the bidding process begun last spring would continue. Vivendi officials have said they hope to reach a deal by the end of September.
Broken dream
Vivendi, stepping back from its lofty dream to create a media powerhouse, hopes to sell its Universal movie and TV studios, theme parks and cable properties -- USA, Sci-Fi and Trio -- for $14 billion to pay down staggering debt.
However, in an unexpected development, Vivendi said that an eventual agreement with either the Bronfman-led group or NBC would still leave the French company with a "substantial" minority interest in a U.S. media company.
Vivendi also said it would also explore a public offering for Vivendi Universal Entertainment.
Some of the biggest titans of the U.S. media world had expressed interest in Vivendi's entertainment arm, including cable TV mogul John Malone of Liberty Media Corp., Viacom's Sumner Redstone, and Kirk Kerkorian, the top shareholder in Metro-Goldwyn-Mayer Inc.
Liberty -- a Colorado-based cable giant that already owns 3.6 percent of Vivendi -- pulled out of the running a day before the Vivendi board meeting, saying the price tag was too high.
Comcast Corp., the biggest U.S. cable company, and MGM 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 financial bar set by Vivendi executives.
In July, Vivendi rejected another bidder, oil billionaire Marvin Davis, who once owned Fox Studios, from the applicant pool.
Merger plan
NBC wants to merge Vivendi's entertainment assets with its own holdings. Besides 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. For years, NBC has long been rumored to be on the lookout for a Hollywood studio.
Bronfman once controlled the Universal assets as the head of Seagram, the Canadian beverage company acquired by his grandfather, Sam, 75 years ago. Seagram bought the studio from Japan's Matsushita Electric Industrial Co. in 1995, then sold the assets to Vivendi.