PARIS (Reuters) - Vivendi (PA:VIV) has made a 250 million euro (£184 million) offer for French online video group Dailymotion, owned by telecoms group Orange (PA:ORAN), Le Monde reported on Monday.
The Le Monde report followed a statement from Hong Kong conglomerate PCCW (HK:0008) that it had ended talks to form an alliance with Dailymotion, citing the French government's desire to see the video-sharing site remain in European hands.
"The French government's preferred search for a European solution discourages international companies' participation," PCCW said in a statement explaining its decision.
Vivendi declined to comment and no one at Dailymotion was immediately available to comment.
Le Monde said Vivendi's offer would be discussed at a board meeting on Tuesday. "Vivendi's ambition is to make Dailymotion a world size player," Le Monde quoted an unidentified source as saying.
Orange has been looking for a partner for over a year to help Dailymotion expand internationally to try to compete with much larger rival Google (NASDAQ:GOOGL)'s YouTube
The French government, Orange's biggest shareholder with a 25 percent stake, said on Monday it was never hostile to the talks but had asked Dailymotion to not enter into exclusive discussions with PCCW before contacting all interested parties.
"Orange pursues discussions and works towards submitting to the board in due time solutions that are being considered," France's economy ministry said.
Economy Minister Emmanuel Macron said last Thursday that Orange should look at all offers for Dailymotion as France was seeking to promote a strong European digital sector.
In 2013, Orange was in talks to sell all or part of the site to Yahoo (O:YHOO) but the French government scuppered the deal over concerns about a promising start-up getting snapped up by a U.S. giant.
Dailymotion counts 128 million unique visitors per month compared with 1 billion for Google's YouTube, and achieves less than 100 million euros ($110 million) in annual sales.
Vivendi is currently facing pressure from U.S. hedge fund P. Schoenfeld Asset Management to increase the company's planned payout to shareholders from a 35 billion euro cash pile amassed from a series of disposals.
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