France's Vivendi is in talks to buy Dailymotion from French telecom group Orange, replacing PCCW Ltd. as the most likely buyer of the video-sharing site after the Hong Kong-based company pulled out due to opposition from the French government.

Paris-based Vivendi said on Tuesday that it "has submitted an offer to Orange regarding Dailymotion." Vivendi declined to give details of its bid for Dailymotion, though French daily Le Figaro claimed the offer valued Dailymotion at more than €250 million ($273 million).

If the deal goes forward, it would be Vivendi's first significant media purchase since it recast itself as a pure-play media group by offloading telecommunications assets over the past two years. Those sales have left Vivendi holding billions of euros in cash, and drawn fire from activist investor P. Schoenfeld Asset Management, which wants Vivendi to distribute the money to shareholders.

Vivendi's announcement came a day after PCCW said it had ended talks to buy a 49% stake in Dailymotion after the French government, which owns 25% of Orange, said it was uneasy about Dailymotion teaming with the Chinese telecommunications company. "The desire expressed by the French government to favor a European solution is discouraging for the participation of international companies," PCCW said. "Therefore we have decided to end our discussions with Dailymotion and its current owners."

Dailymotion is the world's No. 2 video hosting, though it remains a long way behind Google's GOOG YouTube. PCCW had hoped to transform the French site into an Asia-focused rival to YouTube. A deal with the PCCW, which is led by Richard Li, the son of Asia's richest man Li Ka-shing, would also have realized Orange's own hopes of finding a foreign partner to help the service expand outside its home market.

That ambition was not shared by the French state, which last week claimed its right as Orange's biggest shareholder to ask the French telecom company to find a European partner for Dailymotion. "We have a European digital policy," French Economy Minister Emmanuel Macron said on Thursday. "We want our startups to grow, to succeed, but we want them to remain in Europe."

Vivendi has the financial muscle to expand Dailymotion's activities. P. Schoenfeld claims the French company will have about €14.7 billion of gross cash on its books by the time all its telecoms sales clear in the next few months.

Vivendi could partner Dailymotion with its pay-TV operation Groupe Canal+, which wants to expand in Africa. It also owns the world's biggest music company, Universal Music Group, and could use its stable of artists to drive traffic through the video-sharing site.

Vivendi Chairman Vincent Bolloré on April 2 increased his stake in Vivendi to 12%, up from 10%, continuing a share-buying spree that has more than doubled his holding in Vivendi in less than two months.

Those acquisitions have drawn criticism from P. Schoenfeld, which claims that Bolloré is taking control of the company without paying a takeover premium, and has failed to explain what he plans to do with the company's cash. The New York-based activist investor has tabled two motions for Vivendi's annual meeting, scheduled for April 17, which if approved by shareholders would require Vivendi to distribute €9 billion to investors.

Shares in Vivendi traded Tuesday at €23.50, up €0.27, or 1.2%, from their most recent closing price on Thursday, April 2. Shares in Orange traded at €16.53, up €0.20, or 1.2%, from their Thursday close.

This article was originally published at 6:07 a.m., April 7, on The Deal.