Mr Edgar Bronfman Jr's bid for Vivendi Universal's US entertainment assets contains more than $8 billion (€7.3 billion) in cash, offering the French group a smooth exit from the business.

New details of the offer, made by a consortium led by Mr Bronfman, who is a former chief executive of Seagram, emerged as Vivendi executives continued to weigh up sharply different bids ahead of a board meeting due next week.

Until now, NBC - General Electric's US television network - had been seen as the frontrunner in the auction for Vivendi Universal Entertainment (VUE), the holding company for Universal movie studios, theme parks and USA Networks and Sci-Fi cable televisions.

NBC is proposing a merger with VUE that would leave the French group as a minority shareholder, probably with less than 25 per cent.

NBC's proposal does not include any up-front cash payment and would make it very hard for Vivendi to hit its $7 billion divestment target for 2003. Its total debt amounts to $13 billion.

However, Vivendi has asked for an option to sell its stake in the combined group for a guaranteed minimum price at some point in the future.

If necessary, Vivendi could then use the value of the option to secure some of its debts.

Backed by investors Thomas H. Lee Partners, Blackstone and Merrill Lynch, Mr Bronfman is thought to be ready to commit the equivalent of $8 billion, an amount said to represent more than half of VUE's valuation.

With the help of JP Morgan Chase, Wachovia Securities, Merrill Lynch and Bear Stearns, he would then assume VUE's estimated $2.5 billion debt.

This consortium would increase its debt to leverage the deal further.

The third step in this bid involves an equity transaction.

A new entity combining VUE's cable assets and Women's Entertainment, American Movie Classic and Independent Film Channel - the three national TV channels of US cable company Cablevision - would then be created.

The plan would be to list the new company in one to three years' time. - (Financial Times Service)