- The Washington Times - Friday, October 2, 2009

PHILADELPHIA | Comcast Corp. might spend billions for a stake in NBC Universal, a deal that would transform the nation’s largest cable TV provider into one of the most prominent owners of TV shows, movies and other programming as well.

General Electric Co., which owns 80 percent of NBC Universal, has been in talks with Comcast to unload part of the entertainment unit, people familiar with the negotiations told the Associated Press on Thursday. They spoke on the condition of anonymity because the negotiations are still preliminary.

Originally these people said Comcast was negotiating a 20 percent to 50 percent stake in NBC Universal. But later they said a scenario under discussion calls for NBC Universal to be spun off into a separate company. Comcast would own 51 percent and GE would hold the rest. Comcast would pay $4 billion to $6 billion in cash for its stake in the company, which would have about $10 billion to $12 billion in debt.

Comcast also would contribute its own cable networks, worth about $6 billion, to the spun-off company.

A final decision is expected in the coming weeks. But investors already showed displeasure, knocking Comcast shares down 7 percent Thursday as a Standard and Poor’s analyst cut his rating on Comcast to “strong sell” from “hold.”

Comcast has 24 million subscribers in 39 states and Washington, roughly a quarter of the nation’s cable TV customers, and has said that reaching significantly more people isn’t a priority. But it hasn’t made a secret of its desire to own more programming. In 2004, Comcast made a $54 billion hostile bid for Walt Disney Co., which was rejected.

One key element in a deal is whether French conglomerate Vivendi SA decides to sell its 20 percent stake in NBC Universal.

It has an annual window from Nov. 15 to Dec. 10 to unload the holdings, and its CEO has called the stake “non-core.” If Vivendi does sell, GE is expected to buy the stake. It could then contribute those shares to the NBC Universal spinoff.

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