Back for Yet Another Season: The “What Will GE Do With NBC?” Show

Published on September 17, 2009
by Peter Kafka


Even when the M&A market was shut down, Wall Street couldn’t stop speculating about GE’s intentions for its NBC Universal unit. And now that it’s deal-making time again, the chatter is getting very noisy.

Hence the flurry of coverage over yesterday’s remarks by Vivendi CEO Jean-Bernard Levy, in which he said…not very much.

But even Levy’s noncomments are important, since his company may have a good deal to say about the fate of NBCU. That’s because Vivendi owns a 20 percent stake in the company, and it looks increasingly likely to sell this year. And that could trigger a whole series of moves. The Wall Street Journal:

Vivendi, the Paris-based entertainment conglomerate, has an annual option to unload its NBCU stake which it is allowed to exercise beginning each November. The option was part of a deal made in 2003 when Vivendi sold its theme parks and television assets in the U.S. to GE for cash and stock.

If Vivendi exercises the option this year, Mr. Levy said, it will plan to offer the shares in the public stock market unless GE exercises its right to buy the stake.

If Vivendi says it will exercise the option this year, GE would have nine months to pony up an estimated $4 billion to $5 billion if it chooses to buy Vivendi’s stake at a time when it already is struggling to shore up its financial position. Otherwise, Vivendi’s minority stake in NBCU could be put in play, raising a host of potential complications for GE’s ownership of the media company.

Yet another option: GE (GE) and Vivendi work together to sell off all of NBC via a direct sale–Comcast (CMCSA) and Time Warner (TWX) are the names you always hear as obvious strategic buyers, though I’m not sure that’s the case–or even via an IPO.

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