Marvin Davis, an oil billionaire and one-time studio mogul, has approached Vivendi Universal about what amounts to a $20bn (£13bn) break-up bid for the Franco-US media and telecoms group.
Mr Davis, who is heading a group of investors, said the response to his offer had been "positive" and he had been invited back to Paris for more talks. But sources close to Vivendi were reported as suggesting that the offer was too low and did not fit the group's strategy.
The approach is expected to face opposition from Barry Diller, head of Vivendi's US entertainment business who worked for Mr Davis in the early 1980s when the latter owned 20th Century Fox. The two men are reported to have clashed repeatedly over the running of the studio.
News of the approach, and expectations that Vivendi is close to finalising the sale of half its 40% stake in Vivendi Environnement, sent Vivendi Universal shares up 22% to almost €14 (£9) yesterday.
Mr Davis said yesterday: "Our proposal provides full and fair value for the assets and VU's response has been positive."
Vivendi refused to comment, but sources close to the company told Reuters: "The assets are not for sale. The proposal did not interest the company."
As well as opposition from Mr Diller, who is thought to have negotiated a big say in the entertainment businesses when he sold his cable, television and film assets to Vivendi, the offer is unlikely to please Vivendi boss Jean-Rene Fourtou.
Though the terms, said to be $15bn plus the assumption of $5bn of debt, would clear Vivendi's highly stretched balance sheet it would leave it as little more than a telecoms company. It would, however, allow it to trump Vodafone's bid for Cegetel, which controls the mobile phone business SFR.
Mr Fourtou is prepared to see the entertainment operations floated off in a separate company but he is unwilling to cede control of the business.
Meanwhile, the board of Electricité de France is reported to have backed a request from the French government to buy 4% of Vivendi Environnement from Vivendi Universal. It has increased expectations that Vivendi Universal will find buyers for the 20% of the water and waste group it has put up for sale to raise cash to take control of Cegetel.
