MGM is walking away from Universal, makers of The Hulk

Hollywood studio MGM said the assets on sale were "attractive and would fit well" with its business, but were just too expensive.

Vivendi is selling some of Hollywood's best-known assets, including Universal's film studios - the maker of blockbuster movies like "The Hulk" - plus TV interests and theme parks in a multibillion-dollar auction.

MGM had offered to pay $11.5bn for the Vivendi Universal Entertainment (VUE) business.

'Not worth it'

But Vivendi, which is selling VUE to cut its own debts, is thought to want at least $14bn.

MGM said: "Unfortunately, meeting the seller's current price expectation would not be consistent with our valuation of the assets."

MGM's withdrawal has brought a windfall for its shareholders as it had promised to return wealth to them.

They now have the chance to sell their shares at a 25% above the market price. The offer came from Tracinda, the investment house owned by MGM's biggest shareholder, billionaire financier Kirk Kerkorian.

But Vivendi's chances of getting its asking price look dimmer.

Vivendi's new chief Jean Rene Fourtou has made selling the US entertainment business a central part of his drive to cut debts this year.

Media reports have suggested Vivendi was unhappy with the general level of offers and was hoping to push the bidders higher.

MGM's withdrawal leaves four bidders from Vivendi's original short-list, former Universal owner Edgar Bronfman, General Electric, Liberty Media and US media group Viacom.

Vivendi said in June that it had identified six potential buyers for the business.