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Vivendi’s ennui

U's anxiety grows as bidders bide time

NEW YORK — Going once, going twice … Anybody out there?

Jean Rene Fourtou’s Monday “deadline” for final offers for Vivendi Universal Entertainment came and went with hardly a peep from buyers or seller, yet again raising as many questions as answers about just how the company will disentangle itself from Hollywood after a year of deliberations.

Sources in Paris downplayed the importance of the Monday deadline, claiming that the only date to which it has committed itself is a decision for its board before the end of September. The board is due to meet early next week and could name one party that will gain exclusive negotiation rights.

Further delays could create problems at the studio, where executives are struggling to maintain momentum and avoid losing relationships with a nervous creative community.

Viv U shares dropped 3% Monday to $16.85 as the company struggled to maintain the illusion of a bidding war or even a bidding deadline. Sources close to the company would confirm only that Vivendi had received “proposals and confirmations from each of the parties interested in the assets.”

It may be a short list of full-blown bids of the type requested by Viv U, however. The field of contenders has organically narrowed itself down to two main players: GE’s NBC, with its stock and debt assumption joint venture, and Edgar Bronfman Jr.’s private equity-backed cash plus stock offer. All other would-be buyers, including John Malone’s Liberty Media and possibly cable net-hungry Viacom, prefer to play hard to get in the hope that Viv U will come knocking on their door.

NBC seems to be playing its recently strengthened negotiating hand shrewdly. It is apparently holding off from providing Viv U with specific financial info about its proposed joint venture (including NBC valuation details) until Fourtou grants the broadcaster the right to negotiate exclusively.

Sources suggest that while Viv U wants more info from GE on just how it intends to value the new entity, NBC is still winding its way through due diligence to ascertain just how to properly value Universal Studios.

Certainly Comcast’s exit from the process last Thursday may have spooked GE, particularly if reports of the cabler’s barely $10 billion valuation for the VUE package are true.

The French press reported Monday that candidates “weren’t exactly knocking down the door” and that the Aug. 18 deadline had mutated into a “pivot” date because of the blackout that paralyzed business in New York between last Thursday and Saturday.

Separately, a New York judge will hear arguments Tuesday over former CEO Jean-Marie Messier’s $23 million golden parachute and could order his former company to pay up.

While American courts generally favor the employee, Viv U hopes to make the most of French law, which explicitly demands a greenlight from the board of administrators before forking out such a generous severance package.

Messier’s successor Fourtou has refused to honor the package awarded in July 2002 by Edgar Bronfman Jr. and Marc Vienot, the board’s president at the time.

After first agreeing to comply with an American arbitration panel, Fourtou rejected its June 27 ruling in favor of Messier as “scandalous” and “indecent,” vowing “to pay out nothing.”

With the New York court set to rule on the arbitration panel’s decision, Fourtou received some unexpected moral backing Monday when the former president of Alstom Pierre Bilger announced that he was going to give back a e4.1 million ($4.6 million) golden handshake. His largesse follows a $3.1 billion government bailout of the steel giant to save it from bankruptcy.

(Francois Picard in Paris contributed to this report.)