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  1. #1

    Rumor: Comcast interested in NBCU

    UPDATE 4-GE talks to Comcast about NBC Universal -source

    Thu Oct 1, 2009 6:24pm EDT Reuters

    * Talks involve Comcast taking 51 pct, GE taking 49 pct * Comcast may inject assets, up to $7 bln cash - sources * Talks seen progressing but no deal imminent * Other suitors face antitrust, economic challenges * Comcast shares drop 7.2 pct, GE shares down 2.7 pct
    (Recasts first sentence, adds details of talks between
    companies, analyst comments, updates share prices) By Anupreeta Das and Yinka Adegoke NEW YORK, Oct 1 (Reuters) - A deal between Comcast Corp
    (CMCSA.O) and General Electric Co (GE.N) for NBC Universal
    would seem a storybook match -- one wants in to the media
    business and the other may be well-served to get out. Comcast shareholders see it another way, sending its shares
    down 7.2 percent on Thursday as sources familiar with the
    matter said the top U.S. cable service provider was in talks to
    buy a majority stake in NBC Universal from GE. While a deal would allow Comcast to acquire the cable
    networks it has coveted -- Bravo, USA and CNBC, among others --
    shareholders worry it would saddle the company with more than
    it needs. Specifically, the underperforming NBC broadcast TV
    network. NBC Universal also owns a studio and theme parks. "Investors have long pressed Comcast for an aggressive
    return of cash to shareholders," Bernstein Research's Craig
    Moffett said in a note. "An acquisition of a major content
    studio, even if consummated at an attractive price, is most
    decidedly not what Comcast investors had in mind." GE, which has been pressured by investors to offload its
    80 percent stake in NBC Universal, is considering a host of
    proposals for NBC Universal as partner Vivendi SA (VIV.PA)
    explores whether to sell its 20 percent stake. At the moment, the most likely scenario is a deal in which
    Comcast would buy 51 percent of NBC Universal, leaving GE with
    49 percent, according to the sources. The sides still have plenty of details to work out and an
    agreement is far from certain, said the sources, who described
    a complex framework to discussions that are still in the
    earliest stages. They said the plan is for GE to buy Vivendi's stake, and
    put the borrowings that fund that deal on NBC Universal's
    balance sheet. Other debt would also be added to what would
    essentially become a new, stand-alone company. But how that
    company would be valued remains to be seen. One source said it would be worth $23 billion to $27
    billion -- so Comcast would contribute $4 billion to $6 billion
    in cash and $7 billion worth of assets, like the "E" Channel
    and the Golf Channel, in exchange for majority control. Another source said the new company would be valued more
    highly, and Comcast's cash payment would be closer to $6
    billion to $7 billion. Over time, Comcast could increase its ownership stake,
    according to CNBC, which first reported the news. For GE, whose shares ended 2.7 percent lower on Thursday,
    selling NBC Universal would allow it to concentrate on the
    better-performing heavy industrial businesses. It may also be
    the best choice facing GE Chief Executive Jeff Immelt. "If you take Jeff Immelt's commentary seriously, where he
    thinks the economy is in for a slow recovery, then the
    industrial side of the business needs every dollar it can
    keep," said Peter Sorrentino, senior vice president and
    portfolio manager at Huntington Asset Advisors. [ID:nN012577] LIMITED CHOICES? Vivendi has the right to exercise its sell option in NBC
    Universal each fall until 2016, but is thought likely to do so
    this year to fund businesses that it finds more essential. GE could always find another buyer for NBC Universal or
    sell part of it through an initial public offering. But the
    slump in the ad market makes it a risky time to bet on media. Antitrust issues would also make any deal with the owner of
    a broadcast TV network that competes with NBC nearly
    impossible, probably ruling out, for instance, News Corp
    (NWSA.O), owner of Fox, and Walt Disney Co (DIS.N), owner of
    ABC. Time Warner Co (TWX.N) is one company often linked to
    interest in NBC Universal, but a source said it does not want
    the burden of the NBC network even if it wants to add more
    cable channels to a lineup that now includes CNN and HBO. Cablevision Systems Corp (CVC.N) is expected to sell its
    cable networks at some stage, making it an unlikely buyer for
    NBC Universal. Dish Network Corp (DISH.O) and EchoStar Corp
    (SATS.O) were also viewed as unlikely. Sony Corp (6758.T), Microsoft Corp (MSFT.O), AT&T Inc (T.N)
    and Verizon Communications Inc (VZ.N) were all mentioned by
    analysts -- but all were considered long shots. For Comcast, which once failed to purchase Walt Disney Co.
    (DIS.N), a deal would allow it get hold of a major media
    company without taking on any new debt or issuing equity. "The cable networks and the film studio hold the most
    obvious interest for Comcast. They're getting a relatively good
    valuation on their cable networks," said Chris Marangi, an
    analyst with shareholder Gabelli & Co. [ID:nN01262028P] Vivendi, Comcast and GE declined to comment.
    (Reporting by Anupreeta Das, Yinka Adegoke and Paul Thomasch;
    Writing by Paul Thomasch; Additional reporting by Scott Malone
    in Boston and Dominique Vidalon in Paris; Editing by Derek
    Caney, Richard Chang and Matthew Lewis)
    http://www.reuters.com/article/bonds...26911920091001

  2. #2
    Join Date
    May 2009
    Location
    Greater Toronto Area
    Posts
    2,403
    I was wondering when GE would dump NBC. Media didn't seem to fit this company profile, Comcast may have a better stab and running NBC than GE has lately.

  3. #3
    Join Date
    Jul 2006
    Posts
    12,204
    Would be a great move for Comcast, The funny thing is that it's not actually NBC that's attractive to them, it's the specialty channels that NBC owns, USA Network, Syfy, Bravo!, Oxygen, ect.., All of those channels make loads of money and some would fit well with Comcast's E! and Style Network.

  4. #4
    Join Date
    Sep 2009
    Posts
    384

  5. #5
    The deal is done.
    http://www.ft.com/cms/s/0/179c597e-e...44feab49a.html

    I don't like this at all.

    Sounds like what would happen if Rogers bought out CHUM instead of CTV buying out CHUM.

 

 

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