updated 11/5/2006 4:22:52 PM ET 2006-11-05T21:22:52

French entertainment and telecommunications company Vivendi confirmed private equity firm Kohlberg Kravis Roberts & Co. had been interested in buying its business but talks had ended.

"This review, which included maintaining the current Vivendi assets within the group in order to create value, did not result in any proposition and has now ended," Vivendi said in a statement on Saturday.

Earlier people familiar with the matter told Reuters KRR recently made a 40 billion euro ($51.10 billion) bid approach to Vivendi but that talks broke off about a month ago.

French tax laws and other complications that would have arisen in achieving such a deal -- which would for example require the approvals of several governments including France -- contributed to the talks breaking down, said one source.

A Vivendi spokesman declined to comment further on the matter and KKR also declined to comment.

The New York Times had reported the approach earlier on Saturday, citing people involved in the talks, also saying the talks appeared to have stalled if not collapsed entirely.

But one person involved in the talks suggested they could resume, according to the NYT, while another called KKR's bid, the largest leveraged buyout offer in history, "just an opening salvo," describing the negotiations as "dead and not coming back."

According to the NYT, Vivendi initiated the discussions but broke them off after weeks of what people involved described as intense meetings. KKR had been in discussions with both JPMorgan Chase & Co. and Citigroup about financing the transaction, the report said.

Vivendi rejected an informal takeover offer last May from Sebastian Holdings, a Norwegian investment company that had expressed interest in buying the company and breaking it up, according to the Times.

Vivendi owns Universal Music Group, the world's largest music publisher, as well as France's No. 2 mobile telecoms operator SFR, pay-TV unit Canal Plus and a profitable video games division.

The U.S. Department of Justice, meanwhile, is looking into whether private equity firms that form consortiums are breaking antitrust laws and trying to drive buyout premiums down, the report noted.

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