VIVENDI WANTS MORE USA FRENCH SEEKING DEAL FOR CABLE NETWORKS.

Byline: Greg Hernandez Staff Writer

Vivendi Universal, parent company of Universal Studios, is in talks to add to its 40 percent stake in USA Networks Inc., the French media giant confirmed Tuesday.

The talks center on the acquisition of the entertainment division of New York-based USA Networks, which includes such cable channels as the Home Shopping Network, Sci-Fi Channel and its flagship USA Network. The division generated more than $4 billion in sales last year, accounting for 40 percent of the company's total revenue.

Vivendi would not disclose how much it would consider paying for the additional assets but issued a statement dismissing as ``totally absurd'' published reports that the transaction would amount to as much as $18 billion.

Vivendi Chief Executive Jean-Marie Messier told the Reuters news agency that the several months of discussions ``may or may not'' lead to a deal but added the Paris-based corporation seeks to ``optimize synergies in the entertainment area.''

If an agreement is reached, it would provide distribution in the U.S. for Vivendi's large collection of film and television assets. USA Networks' array of channels reach 90 million homes in the U.S.

USA Network Inc. declined to comment on the talks Tuesday.

A deal would see Vivendi buy back the television assets that were sold to media mogul Barry Diller in 1997 for around $4.1 billion by Edgar Bronfman Jr., the outgoing executive vice chairman of Vivendi. Bronfman, who announced last week that he would be stepping down, had merged Canada's Seagram, of which Universal Studios and Universal Music Group are subsidiaries, with Vivendi last year.

Vivendi still owns 44 percent of USA Networks but Diller, chairman and chief executive of the networks, retains voting control of the company. If a deal is consummated, it is not clear what Diller's role would be.

USA Networks produces television shows such as ``Law & Order'' and made-for-television movies through its Studios USA and owns 13 television stations through USA Broadcasting. It also owns 68 percent of Ticketmaster, the largest ticket retailer in the U.S.

John Malone's Liberty Media is USA Networks' other large shareholder, with a 21 percent stake in the company.

Vivendi said Tuesday that a deal would not result in the creation of any new Vivendi Universal shares and that ``all contemplated scenarios under review would result only in a limited amount of cash exit for the company.''

Vivendi's shares fell $1.20, or 2.3 percent, Tuesday on the New York Stock Exchange to close at $50.60 a share. Meanwhile, USA Network Inc.'s shares rose $1.10, or 4.5 percent, to close at $25.05 on Nasdaq.