Viv U, Liberty ring deal

Brofman, Davis also competing for VUE

John Malone’s Liberty Media is said to be finalizing a bid worth $12 billion-$14 billion for Vivendi Universal’s U.S. entertainment assets, excluding music.

Malone met with Vivendi’s chief operating officer Jean-Bernard Levy last week to discuss the price and structure of a deal, according to a report on the Financial Times Web site Sunday.

Bids for Universal Studios and Universal Music are due by the end of June. Liberty has been aggressive in declaring its interest in buying VUE. Two investment groups led, respectively, by Edgar Bronfman and Marvin Davis also badly want the assets. Other parties who have registered interest include NBC parent General Electric, MGM and Viacom.

As the race draws to a close, Wall Streeters and industry players are stepping up efforts to handicap the bidders. While Davis and Bronfman appear to have lined up solid offers, financial backers who are putting in most of the capital in both cases have been know to have a change of heart at the last minute. The extent of GE’s interest is hard to gauge, Viacom appears to be mostly interested in U’s cable channels, and MGM is seen as a long shot. Liberty has the cash and, many think, a pressing need to do a big deal. But relations between Liberty and Vivendi have been strained by a shareholder lawsuit Liberty filed against the French conglom, as well as by Malone’s close ties to Barry Diller.

Vivendi made a point last week of reminding all involved that a standstill agreement prohibits Diller from launching or participating in an acquisition of VUE.