Reports suggest $14bn may be too high a price

Media giant Vivendi Universal has whittled down the shortlist of bidders for its showbusiness arm and said it will enter into separate in-depth talks with the "two strongest".

The chosen two were those widely expected to lead the bidding - General Electric's NBC unit and an investor group led by Edgar Bronfman, the former Seagram chief executive.

Reports suggested Vivendi had strayed from choosing one clear winner after Mr Bronfman upped his offer from $12bn to $13bn at the last minute in an effort to close the gap with NBC.

But Vivendi said it was still exploring the possibility of a public offering for Vivendi Universal Entertainment.

Cash ties

The bids from NBC and Mr Bronfman's group, which includes the investment firm Thomas Lee Partners and the New York cable company Cablevision, would both involve cash and the assumption of some debt.

Vivendi is hoping to use the sale of its entertainment business to pay down its vast debt pile.

The package includes some of Hollywood's best known assets, including Universal Studios and the USA and Sci-Fi cable TV networks.

NBC is still viewed by many as the favourite to buy the group, which Vivendi had been hoping to sell for $14bn.

But some market watchers have suggested Mr Bronfman's cash-heavy offer would be more tempting for Vivendi.

The disadvantage of a bid from Mr Bronfman, whose family firm ran Universal until it was bought by Vivendi, is that Vivendi would give up its entire Universal shareholding; NBC contemplates Vivendi retaining a 20-25% stake.