The lengthy and sometimes controversial auction for Vivendi Universal Entertainment has come down to a waiting game, as the board of directors of its French parent company is expected to mull over three offers at a meeting on Aug, 26.
The second round of bidding for VUE — which consists of cable channels USA Network, Sci Fi Channel, Trio and NewsWorld International, the Universal movie studio and Universal theme parks — ended late last Monday, with Liberty Media Corp. and an investment group headed by former Vivendi vice chairman Edgar Bronfman Jr. submitting formal offers.
General Electric Co.'s NBC television unit also continues to be in the hunt for VUE — the U.S. entertainment arm of Vivendi Universal S.A. — but it did not submit a formal bid on Aug. 18, a source familiar with Vivendi said.
Still, observers said NBC is the frontrunner for VUE, followed by the Bronfman group, which includes private equity firms Blackstone Group and Thomas H. Lee Partners and Cablevision Systems Corp. Cablevision is contributing its Rainbow Media Holdings Inc. national cable channels to the partnership, but no cash.
According to reports last Friday, the Bronfman bid included about $8 billion in cash and the assumption of $2.5 billion of VUE debt.
Liberty's bid was not available, but sources said it is likely well below the $14 billion Vivendi had been asking for the assets.
Bronfman spokesman Tod Hullin declined to comment.
According to reports, NBC chairman Robert Wright met with Vivendi chairman Jean-Rene Fourtou earlier this month to hammer out the details of a deal that would give Vivendi a minority interest in a combined NBC-VUE. Even though no formal offer was made, the source said that NBC confirmed its earlier proposal.
GE is also reportedly angling to gain exclusive bargaining status with Vivendi before the French conglomerate's board of directors meets Tuesday.
Viacom Inc. is also interested in VUE's cable channels, but has said in the past that it would not pursue a deal aggressively.
Vivendi officially began the auction for VUE in April, but has seen a few potential bidders drop out of the running since then. In July, Vivendi told potential bidders that it had set a minimum price of $14 billion for VUE, which forced Metro-Goldwyn Mayer Inc. to drop out of the race.
Earlier this month, Comcast Corp. said it would not bid on VUE, but added that it is exploring a joint venture with Vivendi to develop new channels and services.
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