The board of Vivendi Universal agreed to continue talks with just the "two strongest" bidders yesterday after a four-hour meeting in Paris.
The decision leaves just General Electric, the parent company of the NBC television network, and a private consortium headed by Edgar Bronfman Jr, the former chief executive of Universal who sold the company to Vivendi in the first place, at the table.
Many of the major players balked at Vivendi's minimum sales price of $14bn and withdrew - the latest to do so being John Malone's Liberty Media group, which quit the race on Monday.
The third remaining bidder, Viacom, has now been ruled out. The media conglomerate was only interested in Vivendi Universal's cable television assets rather than the whole entertainment array, which also includes Universal Studios and a considerable theme park empire.
Of the final bidders, GE is widely viewed to be the favourite, even though it is proposing a merger with Vivendi Universal Entertainment rather than a buyout. This would combine its CNBC, MSNBC and Bravo networks with Vivendi's studio, library and cable channels.
Mr Bronfman is believed to have amassed as much as $13bn for his bid, but his candidacy has been taken less than seriously by industry insiders.
Vivendi Universal's board is now left to decide between a strong strategic proposal from GE and a bid that could give the debt-laden group more cash upfront. "In both cases, Vivendi Universal would maintain a substantial minority interest in a US media corporation with excellent growth potential," Vivendi said in its statement.
Vivendi's chief executive, Jean-Rene Fourtou, had hoped this summer's auction would enable him to wave goodbye to Hollywood, but things have gone less than smoothly.
Serious players such as Comcast, the cable company, and MGM, which owns the old Hollywood studio as well as casino interests in Las Vegas and beyond, dropped out in the early running, and no new bidders came along to replace them.
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