General Electric (GE) and Vivendi SA In Talks Over NBC Universal Sale; May Put Comcast (CMCSA) in Driver's Seat
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General Electric (NYSE: GE) and Vivendi SA are in talks to find out what Vivendi should be paid for their monority stake in NBC Universal, a Wall Street Journal article reported today. Sources say that the two groups are about $500 million apart in negotiations.
If the deal were to stick, U.S. cable operator Comcast Corp. (NASDAQ: CMCSA) would be the largest shareholder of NBC Universal, and GE may see themselves out of the entertainment business.
Vivendi currently owns 20% of NBC Universal, and GE owns 80%.
Recent talks have Comcast paying cash and merging its cable networks with NBC Universal for a 51% stake in the company. NBC Universal would then borrow cash, which it would pay Vivendi with, leaving GE with a 49% stake in the company.
Vivendi received their stake in 2004, when NBC Business merged with the French telecom and media company. The company says that it intends to be paid book value of their stake, currently valued at $6.3 billion based on recent exchange rates.
Other companies mentioned in a potential bidding war were News Corp. NYSE: NWS) and Liberty Media Corp. (NASDAQ: LCAPA). "Like we do with everything, we will certainly have a look at that deal and see what opportunities are there, but we are not in any negotiations," said Rupert Murdoch, News Corp.'s CEO.
One scenario could also see Comcast obligated to pay up to $6 billion to GE over several years. Maintaining an investment-grade debt rating at both Comcast and NBC Universal is a key parameter of the deal.
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