Earlier this month, I posted about all the rumors surrounding GE and its 80% ownership of NBC Universal now that the Vivendi put is coming due. (The conventional wisdom, as yet unconfirmed, is that Vivendi may decide to sell its 20% of NBCU this year since the French company is more interested in expanding into telcom than hanging onto a non-core asset like media.) So a “what if” scenario is developing between GE and interested companies which include media giants. I’ve learned that GE for the past two months has talked to at least half a dozen tire-kickers for either an investment in or acquisition of Vivendi’s 20% of NBCU or more of the media company. Sources say Comcast, for instance, might be interested in a 50% stake in NBCU. But Comcast tonight is denying an Internet blog’s bullshit that a “deal was done” (and the blog has already backtracked from that very inaccurate claim). The truth, deep Comcast sources are telling reporters, is that there’s “nothing imminent” and “no price yet” while looking in the general direction of NBCU. Why now? Because, every November, Vivendi can trigger a right to sell its 20% stake in NBCU, either in the market or to NBCU’s parent General Electric which has the right to sell the stake to a 3rd party.
On September 16th, I posted that one of the “saner” rumors “that seems within the realm of possibility” surrounding NBC Universal was that Comcast and GE were cooking up a deal because the Vivendi put option was coming due. During this past summer, Comcast’s name surfaced in the media — ironically, when its stock price reached historical lows — because investors were worried the company was hoarding its cash to try for something along the lines of Comcast’s failed $54 billion hostile bid for the Walt Disney Co back in 2004. That same year, when GE’s NBC was trying to buy Universal, I’ve learned that Comcast also did due diligence on Universal. (The studio was then owned by Vivendi.)
I also reported on September 16th that GE recently has been asking Universal for more and deeper financial info than ever before. Then, on September 23rd, I posted that during a visit to the West Coast the week before, NBCU chief Jeff Zucker told both Universal and NBC, “We have to be ready in case Vivendi exits for an IPO”. At the same time, the rumors were circling: Comcast, Time Warner, and, most unlikely of all considering Sumner Redstone’s under-water financial condition, Viacom.
Both Comcast and Time Warner have built up war chests which their CEOs could spend on a deal like this instead of continuing share buybacks. Then again, the deal would have to make sense. (Time Warner is still smarting from that $11B goodwill writedown resulting from the AOL deal in 2001.) Problem is, GE has always over-valued NBC in the past, and GE seems to be doing that now for a stake in NBC Universal. And there’s the possibility this could be a multi-sided deal — say, Comcast and Time Warner and GE for NBCU. Meanwhile, if talks between GE and Comcast step up, look for Liberty Media’s John Malone to also step in since his DirectTV is in a pitched battle for turf and content with Comcast, the largest U.S. cable service provider.
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