Viacom Offer Is Expected for Some Universal Assets

Viacom Inc. has told Vivendi Universal that it will make an offer for some of the French company’s U.S. media assets in a second round of bidding, according to sources close to the situation.

Viacom did not bid in the auction’s first round, which ended Monday, because Vivendi requested that only suitors interested in all of Vivendi Universal Entertainment participate. Viacom is interested in buying only Vivendi’s cable channels, in particular the Sci Fi Channel.

Also up for auction are Universal’s movie and television studios and theme parks and the world’s largest music company.

The timing of the second round is unclear, but it probably would occur after Vivendi’s board meets Monday, when the initial bids will be presented and discussed.

Sources said Viacom probably would bid for the cable channels, which also include USA Network and Trio, as well as Universal Television, producer of shows such as NBC’s “Law and Order.”

Viacom appears to be interested in keeping its hand in the auction in the event that bidders need to partner up if prices escalate in subsequent rounds.

Sources said Vivendi contacted Viacom after it failed to bid Monday to urge the media giant’s participation. One source suggested that the outreach reflected disappointing bids.

At the moment, the front-runner appears to be cable mogul John Malone, whose Liberty Media Corp. made a surprise offer for all the entertainment assets, including the music unit.

Malone added music at the last minute, but it is unclear whether it was a tactical move to improve his position against other bidders or an indication he believes the business is poised for a rebound after being bludgeoned by piracy.

Bidding against Malone are Metro-Goldwyn-Mayer and two investment groups, one led by oil tycoon Marvin Davis and the other by Vivendi Vice Chairman Edgar Bronfman Jr.

NBC had been expected by Vivendi to bid, but it submitted only a letter of interest. Since Monday, however, executives at Vivendi and NBC, a unit of General Electric Co., have set up a meeting to discuss NBC’s interest. The network would like to merge with VUE to form a private company. But such a plan would not meet Vivendi’s desire for cash to pay down debts.

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Times staff writer Richard Verrier contributed to this report.