4 Bids Submitted for Vivendi Unit
By Geraldine Fabrikant With Andrew Ross Sorkin
Four companies submitted bids for Vivendi Universal's entertainment assets
yesterday, but the most intriguing development, in the view of several people close to Vivendi, may have
been the mere statement of interest by a fifth — the NBC unit of General Electric.
Although the size of the bids could not be determined, a person close to Vivendi
said that Liberty Media, led by John C. Malone, had made a bid. So did two investor groups, one led by
Edgar Bronfman Jr., the former chief executive of Seagram, and the other by the entrepreneur Marvin
Metro-Goldwyn-Mayer also submitted an offer, this person said, but only for the
Universal film library, which may make it unlikely that M.G.M. will emerge as the winner.
The wild card is NBC, which is said to want the Vivendi cable businesses — USA
Network and the Sci-Fi Channel — and the film and television studios. Late yesterday, though, an
executive close to NBC said that it had submitted only an "expression of interest" in a letter
that the executive said was not specific about the properties it had in mind.
Although Vivendi has said publicly that all bids were due yesterday, the person
close to Vivendi said that was not a strict deadline, particularly in the case of a bidder like NBC.
"They want NBC, and they will give them every chance to be in the
bidding," this person said of Vivendi. "General Electric is a big, well-known company and a
deal with G.E. would make Vivendi look like it had invested in the right place."
One media executive said that even if NBC made no specific offer yesterday, its
letter of interest was significant, because NBC's chairman, Robert C. Wright, probably could not have
sent it without the consent of General Electric. That does not necessarily mean, of course, that G.E.'s
chief exective, Jeffrey R. Immelt, would actually sign off on making a multi-billion-dollar offer.
Meanwhile, Viacom, the giant media company that owns CBS and MTV Networks, is
interested in the cable programming, particularly the Sci-Fi Channel, but apparently is waiting a bit to
bid. Viacom's offer for those assets could come later this week, executives close to Viacom said.
Vivendi Universal, which is expected to retain a stake in the properties it sells,
declined to comment on the bids.
Industry executives expect the eventual price to be in the range of $18 billion to
$22 billion, if all of the assets on the trading block are included: the film and television studios,
cable channels and theme parks that make up Vivendi Universal Entertainment, and the Univeral Music
The Bronfman and Davis groups each submitted bids for all those assets, the person
said, each offering to buy 70 percent of the properties, with Vivendi retaining a 30 percent stake.
While Liberty Media is primarily interested in the holdings other than the music
business, its offer could include the unit, this person said.
Vivendi would prefer to sell off Vivendi Universal Entertainment intact, though,
because a piecemeal sale of assets could result in a high tax bill. The Paris-based company, which is
trying to whittle down an enormous debt, is also willing to sell Universal Music, but has indicated it
does not have to do so.
Several people close to Vivendi said they expected the decision to come only
through a drawn-out process that could take until at least mid-July.
"I don't think they will decide very quickly, because I think they want to get
the best deal," the person close to Vivendi said.
This person pointed out that the Vivendi board will not meet until June 30, when it
is likely to simply review the offers. By mid-July, "it could be that you would know who Vivendi
was negotiating with, but there would still not be any winners or losers," he said.
An executive close to one bidder predicted that the auction might run into
September. Among other issues, this person said, is that bidders have not yet held detailed discussions
with Vivendi's management about the business strategies of each of the entertainment assets that is for
Shares in the four public companies that submitted bids or have expressed interest
fell yesterday along with the broader markets. Liberty Media fell 28 cents, to $11.14; General Electric
dropped 14 cents, to $29.87; Viacom dropped 46 cents, to $44.64; and M.G.M. fell 15 cents, to $11.95.
Shares of Vivendi fell 3.6 percent, to 16.10 euros in Paris. Its American
depository receipts, traded in New York, fell 67 cents, to $18.55