MGM pulls out of Vivendi auction

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In a "you can’t fire me, I quit," move, Metro-Goldwyn-Mayer Inc. dropped out of the bidding for
Vivendi Universal Entertainment, saying parent company Vivendi Universal’s asking price
was too high. "The VUE assets are attractive and would fit well with MGM.
Unfortunately, meeting the seller's current price expectation would not be
consistent with our valuation of the assets," the company said in a prepared statement.

MGM has been seen as one of the weaker of the six VUE suitors, lacking the
financial firepower to mount the kind of bid Vivendi sought.

MGM’s last offer came to $11.5 billion, but Vivendi is believed to be seeking
$13 billion-$14 billion.

Liberty Media Corp. and a group led by Edgar Bronfman Jr. are the two remaining
companies that submitted straight bids for the VUE portfolio of cable networks,
Universal Studios and theme parks.

NBC has proposed more of a merger than a sale, and Viacom Inc. is declaring
interest in buying cable services USA Network and Sci Fi Channel, but it has not
actually submitted a formal offer.

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