VIVENDI FIDDLES, BIDDERS BURN

Uncertainty over future management of the company’s film studios is beginning to make VUE’s talent anxious, and could make it difficult to strike new deals with actors, writers and producers, which directly affect the worth of those assets.

Last week, MGM offered to raise its offer by $300 million to $11.5 billion for VUE in exchange for more financial information, which Vivendi refused to provide, citing the offer as still "too low." Sources say MGM was interested in details of international TV licensing agreements and cable channel carriage contracts.

Despite the disagreement, sources insist MGM remains very much in the running for VUE, along with Liberty Media, GE’s NBC, Viacom and investment teams headed by Marvin Davis and Edgar Bronfman Jr.

Although VU would prefer a cash-heavy deal, the company isn’t in as much of a rush to make the deal, even hinting it would resort to a public offering if it didn’t receive a satisfactory offer. If the stalemate continues, though, insiders feel the company’s value could be threatened as talent gets more and more antsy, making an IPO particularly risky.

"They are not as strapped for cash as they were eight or nine months ago," a Wall Street banker told TelevisionWeek, "but timing is still a factor and things are not resolved."

Fourtou is hoping the auction bidding war will result in the company’s shareholders getting the best possible deal to recoup some of the huge losses they experienced under Jean-Marie Messier. He is also wary about the perception that, having overpaid for Seagram, the French company won’t be fleeced by Hollywood again.

MGM and Liberty, because of their cash-intensive bids, are considered the leaders at this point, but none of the others have blinked. Sources indicate that the company’s UMG music division remains off the table for now, "but anything is possible… it’s still a fluid situation."