It looks as if Vivendi chairman Jean-Marie Messier will be saying 'Bonjour Hollywood' within just a matter of days after both he and his prospective second-in-command Edgar Bronfman Jr separately confirmed that their hot-and-heavy negotiations to take over Seagram are all but wrapped up. The resulting Paris-based media and communications giant, Vivendi Universal, will focus on music, Europe and the internet and enjoy a stock market capitalisation of around $100bn.

"There is a Vivendi board meeting next Monday and clearly we will talk about this. [But] whether one board meeting is enough to make a decision on an operation of this size is not clear. We are talking about a decision in days or several weeks," said Messier on Thursday(June 15).

Also going public for the first time was Seagram chief executive Bronfman, whose family will end up being the largest single shareholders in Vivendi Universal with an 8% stake. He told Business Week that the deal negotiations that began in April and will leave Seagram controlling 5 of the 18 board room seats are now "virtually complete." By his reckoning, the last few remaining loose ends likely to be tied up as early as the last week in June.

Speaking of his pending role as Vivendi Universal's second-ranking executive, a position that will require him to commute weekly to the Paris headquarters from his current home in Manhattan, Bronfman is quoted as saying: "We think of it as a partnership, but Messier will be the ultimate leader. He's extremely smart and tough, a deal maker who knows how to get things done. That's extremely important to me because this is Stage One. There will be opportunities going forward for us to do many more things."

Laying out his new agenda as chief executive of what will rank as one of the world's top five entertainment behemoths, Messier made it clear that the new group will focus exclusively on media, both old and new, rather than the industrial roots from which his company sprang. Speaking at Fortune's Global Forum 2000 forum in Paris, Messier said: "You could assume that the drinks and spirits business does not have a role in the combined entity." And he added that Vivendi's water and waste services division is still on course to be given a separate stockmarket listing.

The drinks disposal and a listing for the water business could eliminate group debts ahead of an investment drive. Messier said that cash will not be necessary for the bid, which he would expect to be an all share affair. The stock-swap deal is expected to value Seagram at between $77-$79 a share.

Further corporate upheavals may be necessary. While Canal Plus is integral to the deal, current French laws prevent an industrial company owning more than 49% of a French broadcaster. Vivendi is therefore considering some means of spinning off Canal Plus into a separate holding company.

"If this deal comes to fruition it will lead to the creation of a fully integrated group which has majority control of all its content," said Messier. "AOL-Time Warner is a US-centric group. A combination of Vivendi, Seagram and Canal Plus would be much more balanced."

Messier said that harnessing music for new media delivery is the key motivation for the deal. He said that even with the combination of Universal Studios and PolyGram Filmed Entertainment, music accounts for 80% of Seagram's content offering and forecast that it would contribute operating profits of over $1bn this year. (That would represent a major turnaround: in the three months to March it lost $23m.) "The music business is characterised by low capital employed, strong profitability, low volatility and a formidable development potential on the internet."

While Messier trumpeted the virtues of music on the net, the European Commission today (June 15) said it will open an investigation into Vivendi's planned Vizzavi portal (see separate story). "My strong feeling is that music was born for the internet. And music and Vizzavi is a winning card for the new age of multi-access internet," Messier said.

The deal continued to impact negatively on the share prices of the bidders, although reactions today (June 15) were more muted than on Wednesday (June 14), when the bid talks were confirmed. Investors appeared worried that Vivendi will become even more of a holding company than it is at present. Vivendi shares dropped 4.9% to Euros98.45 and Canal Plus shares slipped 9.6% to Euros15.71. Seagram shares moved ahead by 1.6% to $64.0.

Also seeing his shares bouyed by the deal was Barry Diller, whose USA Networks is 43% owned by Seagram after he was sold most of the Universal's television assets. Diller, whose assets include Ticketmaster, the Home Shopping Network, cable networks and the independent film studio USA Films, may see its international ambitions better matched under Messier. USA's shareprice jumped 11% yesterday on the merger news.

Relations between Diller and Bronfman are said to have soured ever since the Canadian exercised Seagram's right to veto any USA deal involving more than ten per cent of its market capitalisation of roughly $16bn and prevented Diller from buying the NBC network. There were even suggestions in the US media yesterday that Diller would consider counter-bidding for Seagram, although such a scenario would be complicated by the same veto control that thwarted him in the past.

Patrick Frater IN LONDON and Colin Brown IN NEW YORK also contributed to this article.