Vivendi Rebuffs MGM’s Demand

Metro-Goldwyn-Mayer Inc. got the cold shoulder Tuesday from the object of its desire: Vivendi Universal.

The French conglomerate told MGM that it would not be pressured into providing the more detailed financial information that the studio wants in exchange for a sweetened bid for Vivendi’s U.S. entertainment assets, sources familiar with the matter said Tuesday.

Chief Executive Jean-Rene Fourtou and other Vivendi executives are determined to sell the assets on their own terms and timetable. But the sources said Vivendi had stopped short of rejecting the studio’s bid outright, and added that talks were expected to continue.

It’s the latest move in what has been a corporate chess match between prospective suitors and Vivendi, which has resisted efforts to speed up the auction process.

Earlier this year, Vivendi rejected a demand by billionaire Marvin Davis to have the company negotiate exclusively with his investment group.

More recently, Vivendi reportedly rebuffed a request by Liberty Media Corp. to negotiate exclusively with the company controlled by John Malone, who is viewed by many as a front-runner in the hunt for Universal.

In another sign of its desire to control the process, Vivendi has also backed away from its earlier timetable for coming up with a short list of candidates, sources close to the company say. Vivendi may not narrow the field of bidders by the end of July, as many expected.

Fourtou believes it is in the company’s best interest to coordinate the auction in a slow, orderly manner to try to recoup some of the huge losses Vivendi shareholders incurred under former CEO Jean-Marie Messier, who was ousted last summer.

In a letter to Jean-Bernard Levy, Vivendi Universal chief operating officer, MGM Chief Executive Alex Yemenidjian offered to increase the bid by $300 million to $11.5 billion for the Universal movie studio, theme parks and TV businesses.

But MGM said its higher offer would be withdrawn unless Vivendi supplied more detailed financial information about the Universal operation, sources familiar with the matter said. Among the information MGM is seeking are records relating to Vivendi’s contracts with cable operators and what foreign rights it has sold on movies.

On Tuesday, Vivendi told MGM that it was evaluating additional information it would supply to bidders, sources familiar with the matter said.

In addition to MGM, Liberty and the Davis group, a consortium led by Edgar Bronfman Jr. also has bid for the Universal assets. Viacom Inc. has said it is interested in buying only Universal’s cable channels, while General Electric Co.’s NBC has proposed a merger with Universal film and TV operations.

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Times staff writer James Bates contributed to this report.