Comcast, GE set NBC's value at $30 billion
Comcast Corp. and General Electric Co. agreed to value GE's NBC Universal at about $30 billion as they discuss creating a joint venture to own the entertainment division, according to three people familiar with the matter.
Vivendi SA, which owns 20 percent of NBC Universal, isn't yet part of the agreement, according to one of the people, who sought anonymity because negotiations aren't public.
GE and Comcast, the largest U.S. cable company, are in talks to create a company that would include New York-based NBC Universal, people familiar with the matter said last month. Comcast would own more than 50 percent of the venture, which would contain assets from both companies.
Locally, Comcast has operations in Schaumburg and Hoffman Estates.
Any deal is dependent on Vivendi selling its stake. The Paris-based company can notify GE during an annual window between Nov. 15 and Dec. 10. Vivendi is in "no hurry" to exercise the option, Simon Gillham, vice president of communications, said in a Nov. 3 interview.
Gary Sheffer, a GE spokesman, and John Demming, a Comcast spokesman, declined to comment yesterday. Vivendi's Gillham didn't return an e-mail seeking comment outside regular business hours.
Comcast would contribute $4 billion to $6 billion plus cable channels E! Entertainment, Golf Channel and Versus, according to one of the people. GE would contribute its 80 percent stake in NBC Universal, one person said. The unit operates theme parks, a movie studio, broadcast networks and cable channels including Bravo, USA and CNBC.
Company Strategies
The structure being discussed would allow Comcast to buy cable programming that Chief Executive Officer Brian Roberts has targeted as a priority for acquisitions. GE would retreat from a business that some analysts have urged CEO Jeffrey Immelt to divest because it doesn't fit with the parent's industrial, finance and health-care focus. Vivendi CEO Jean-Bernard Levy has described NBC Universal as "non-core" and has made acquisitions in other areas.
GE and Comcast are looking to finish an agreement within the next two weeks, and the resulting entity would have a net $9 billion in debt, one of the people said. Last week, Comcast and GE met with debt-rating companies to ensure that the debt the new venture would take on wouldn't push the new entity below investment grade, said people familiar with the matter.
The deal, upon closing, may take as long as a year to pass U.S. regulatory approval, said the people.
The venture would pay Vivendi over time, using cash generated from operations, one of the people said. Comcast could do the deal without jeopardizing its dividend or share repurchases, said the person. Comcast has the option to buy out GE's minority stake at 3.5-year and 7-year intervals, people with knowledge of the discussions said.
Comcast, based in Philadelphia, rose 39 cents to $14.59 on Nov. 6 in Nasdaq Stock Market trading. Fairfield, Connecticut- based GE advanced 90 cents to $15.33 in New York Stock Exchange composite trading. Vivendi, owner of Universal Music Group, fell 4 cents to 19.29 euros in Paris trading.
The NBC Universal valuation was reported yesterday by the Wall Street Journal.