FIVE SUITORS BID FOR VU ASSETS

Yes, folks, it’s Survivor, media-conglom style, as Liberty Media, MGM Studios and General Electric, along with partnerships headed by Seagram chief Edgar Bronfman Jr. and oilman Marvin Davis, have submitted non-binding offers between $10-$15 billion for Vivendi Universal Entertainment, the blanket moniker for Vivendi’s U.S. holdings.

In the next stage of the competition, Vivendi will narrow the field to two finalists by July 1. The conglom’s stated first preference is to sell the whole kit and kaboodle—movie studio, theme parks and cable-TV joint venture, along with music (which is not technically part of VUE)—putting GE and MGM, each of which is interest is in the cable holdings and studio only, in the second tier.

Liberty Media has reportedly joined Bronfman and Davis in making a bid that includes the marketshare-shredding Universal Music Group, but that move would appear to have been made by Liberty magnate John Malone in order to increase its odds of advancing to the next round, as the suitors elbow for position.

"It’s like pot luck," one insider observed. "Everybody is positioning themselves to be one of the finalists in the bidding process. It will go down to the wire, but at this stage, they’re all trying to show who’s got the biggest…portfolio."

Vivendi had previously said it wanted to keep UMG, arguing the weak music industry is poised for a turnaround, but it has more recently taken an open-ended attitude toward the VUE-plus-UMG scenario.

Unlike the other bidders, both the Bronfman and Davis groups plan to create a new entertainment entity in which Vivendi would retain a substantial minority stake, pending a future IPO.

Viacom stayed out of the first round altogether, after chief Sumner Redstone stated that he was only interested in acquiring VUE’s cable holdings. Redstone has reportedly been told by the company that he can come back with another offer if the other bids fall through.

All offers included detailed financing letters and proposals to satisfy potential antitrust risks. At presstime, Vivendi was expected to continue entertaining offers until Wednesday (6/25). Citigroup will advise VU on the sale, with Goldman Sachs assisting.