Thelong-drawn out process of selling the historic Babelsberg studios near Berlincould be drawing to a conclusion.

VivendiUniversal, the debt laden French group which has owned the facility since 1992,has fielded bids and is understood to have whittled these down to two or three.The likely favourites are Studio Hamburg - the production arm of NDR, an affiliate of the ARD TV group - and a buyout team headed by managing director Thierry Potok. A thirdbidder is said to be a Munich-based investment group, but it is so clouded insecrecy that the other bidders are not completely convinced of its existence.

VivendiUniversal, which continues to offload assets since the sale of Universal, isunderstood to have set itself an internal deadline of the end of June for adecision on the Studio Babelsberg disposal. If it fails to meet thisnegotiations are expected to drag on until the end of the year. "We've comecloser in the last weeks," said Sytze van der Laan, CEO of Studio HamburgProduction. "All the numbers are on the table now, everyone knows whereeveryone else stands. A deal should just about be possible by the end of June."

Outstandingare two issues: price and politics. Although it has recently housedhigh-profile productions including Around The World In 80 Days, Beyond TheSea and The Bourne Supremacy, the studios have consistently lostmoney. Any buyer will have to pick-up a raft of debts and immediately invest inrenovation. "They are in roughly the same shape that Goebbels left them in,"said van der Laan. This means that the bidders, rather than offering money forthe property, are seeking payments to take the studios off Vivendi Universal'shands.

Theregional authorities are also concerned that the successful bidder correctlymanage the studios and preserve their heritage which goes back as far as theMarlene Dietrich classics such as The Blue Angel.

Inits bid, Studio Hamburg has made a commitment to maintaining the studios as afacility for feature film productions. Its Berlin-Adlershof facilities are largelydevoted to TV production (with the exception of its "G" studio which housed GoodBye Lenin and Resident Evil) and sees Babelsberg as complementary.

Previously,Potok has spoken of making Babelsberg home to local German and Europeanproductions, not just visiting super-productions from across the Atlantic. He also has talked about setting up aproduction fund for Babelsberg.

Contacted by Screen International, VivendiUniversal offered no comment.