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Insiders caution not to count anyone out of the running yet.
VIVENDI UNIVERSAL ENTERTAINMENT MANEUVERING CONTINUES
Going, Going, Not Even Close to Gone as Bidders Come, Go
Vivendi Universal chief Jean-Rene Fourtou must be enjoying this.

The game of positioning and negotiation being played out among bidders for VU’s entertainment assets—a collection that includes Universal Studios as well as television production, cable and theme park holdings under the Vivendi Universal Entertainment umbrella—has brought a barrage of media coverage and speculation, but so far, little in the way of concrete development.

Insiders have said Fourtou is determined to control the pace of the auction for VU’s benefit, as when he rebuffed MGM’s ultimatum last month to provide a closer look at VUE’s broadcast carriage deals or risk losing the Kerkorian-controlled studio as a suitor.

Last week, MGM nominally withdrew from the bidding. And now, reports have surfaced that John Malone’s Liberty Media has cooled on the idea of further pursuing a bid for VUE—partly as a result of the high asking price (around $15 billion), partly as a result of Liberty’s recent, near-$8 billion deal to acquire Comcast’s stake in QVC, and perhaps partly as a result of an ongoing lawsuit filed by Liberty against Vivendi claiming the latter misrepresented financial information in its 2001 purchase of USA Networks, of which Liberty owned a large chunk.

If MGM and Liberty have actually backed away, they join oilman Marvin Davis (who was asked to bow out) on the sidelines, leaving General Electric’s NBC, Viacom and Edgar Bronfman Jr.’s financial collective, which includes backing from Cablevision.

But now, the New York Post reports today, it looks like Comcast is seriously considering a bid for VUE, having hired former Universal Studios chief Frank Biondi, now managing director of a private equity fund in the media sector, to conduct due diligence.

As the biggest cable company in the country, Comcast is expected to make a play for some kind of “content,” and the $8 billion or so it’s likely to score from the QVC sale to Liberty may already be burning a hole in its pocket. The Post reports that insiders think if Comcast doesn’t get in on VUE, it may well make a run at MGM or Disney.

With second-round bids due soon, NBC has now emerged as the favorite, with the French currently working with the GE unit to hammer out details of a possible joint venture.

But insiders caution not to count anyone out of the running yet. The jockeying for position is likely just beginning, and he who is out today may well be back in tomorrow. Stay tuned.

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