French utility and media giant Vivendi has reportedly broken off talks with Seagram Co. about a potential acquisition of the spirits and entertainment company, according to executives and European news reports.
Thursday's Financial Times reported that Vivendi ended discussions because Seagram Chief Executive Edgar Bronfman Jr. has been seeking too high a price.
Executives inside Seagram added that another stumbling block has been how to dispose of Seagram's liquor business.
Seagram, which has never acknowledged that it is seeking a potential deal, is known to have been exploring possible mergers as an answer to the pending combination of Time Warner Inc. and America Online. So far, its efforts have been fruitless.
Vivendi, which has been looking to expand its entertainment holdings, was still considered a possible Seagram merger partner even as hopes faded that Seagram would strike a deal with anyone.
Among other parties that have held discussions with Seagram are Barry Diller's USA Networks and Rupert Murdoch's News Corp.
Bronfman has said only that he plans to run the business for a long time, which observers have interpreted to mean that he wants to continue in a management role even if Seagram finds a merger partner.
Separately, Vivendi approved a proposal to protect the utility and media company from a "creeping takeover," a practice in which minority shareholders manage to take control of a company little by little, without submitting a formal takeover offer.
"I don't feel like having Murdoch take 15% of the company and running things over here," said Vivendi Chief Executive Jean-Marie Messier, referring to Rupert Murdoch, chief executive of News Corp. and chairman of British Sky Broadcasting Group. Vivendi owns 24.5% of BSkyB.
Messier and Murdoch have been courting each other in Europe's fragmented media market without ever reaching an agreement to work together. The two are in talks about cooperation in developing interactive services and media content through Platco, the international satellite television company News Corp. is setting up.
Bloomberg News was used in compiling this report.