UPDATE 2-GE's Immelt says evaluating options on NBC

Fri Oct 16, 2009 5:28pm EDT

* CEO says considering IPO, or another partner

* Says "logical" to consider post-Vivendi options

* News Corp says would "look at" NBC Universal deal

* Liberty says GE bankers listening to interest-report (Adds Malone, Murdoch quotes)

By Scott Malone and Yinka Adegoke

BOSTON/NEW YORK, Oct 16 (Reuters) - General Electric Co (GE.N) is considering various scenarios for the future of NBC Universal should minority partner Vivendi SA (VIV.PA) choose to sell its 20 percent stake, its top executive said on Friday.

GE Chief Executive Jeff Immelt said the conglomerate is looking at an IPO, or a deal with a new partner, against a backdrop of reports that it is in talks about selling a controlling stake in NBC Universal to Comcast Corp (CMCSA.O).

Adding to the mix on Friday, News Corp (NWSA.O) and Liberty Media LINTA.O suggested that they would look at the NBC Universal deal and any opportunities that might arise from the ongoing talks.

GE, which owns 80 percent of NBC Universal, is awaiting word from Vivendi on whether it intends to exercise a put option to sell its 20 percent stake.

GE has said little about a potential deal involving NBC Universal, a major media company with a broadcast TV network, movie studio and theme parks. It has not publicly acknowledged talks with Comcast.

Speaking to investors on an earnings conference call, however, GE's Immelt made clear that a deal involving NBC Universal is indeed a distinct possibility.

"Vivendi has been a great partner," he said. "They've got a window every year to review their options for NBC and this year we wanted to be ready for several scenarios."

Among the alternatives, he said, GE could bring on another partner or undertake a spin off through an initial public offering.

Immelt did not name any potential partners, but said the level of interest in NBC is "logical, just given the process that Vivendi goes through each year." Immelt did not elaborate.

Vivendi has an annual option to sell its stake from Nov. 15 through Dec. 10.

OTHER OPTIONS

According to sources, GE and Comcast, the largest U.S. cable company, have been talking for weeks. Under consideration is a deal that would combine Comcast's cable network assets and $4 billion to $6 billion of cash with NBC Universal to create a larger company. Comcast would have a 51 percent stake and GE would own the rest.

Sources have said a deal with Comcast is more likely than an IPO, since it would offer more cash for Vivendi.

These people also have raised doubt about other partners stepping in to the mix, voicing skepticism that News Corp or Liberty would be serious alternatives in the near-term.

Liberty Media Chairman John Malone told reporters that GE's bankers at Goldman Sachs have been instructed to "listen, but not talk," according to trade magazine Multichannel News.

Malone, speaking at his company's annual investor meeting, said he would be interested in getting involved in NBCU at the right price but felt the reported deal value was too high, according to published reports.

GE and Comcast are said to value NBC Universal around $30 billion, which by Malone's math is 11 times 'real cash flow.' He said he'd be interested at a lower valuation of around 7 times cash flow, according to the reports.

Separately, News Corp Chief Executive Rupert Murdoch said his company plans to examine the Comcast-NBCU deal to see if opportunities present themselves but said it is not involved in any talks at this time [ID:nN16350675].

GE has long faced calls from investors to consider selling the media business, which were loudest when NBC profits were declining. In the just-ended third quarter, NBC turned in one of GE's strongest divisional performances, recording 13 percent profit growth. [ID:nN16143307]

Lately, investors have said that a GE sale of some of its NBC stake could help the company avoid having to raise additional capital through a stock sale, should losses at its GE Capital finance arm rise above its forecasts. GE has repeatedly said it does not expect to need extra cash. (Additional reporting by Robert MacMillan in New York; Editing by Paul Thomasch, Derek Caney and Carol Bishopric)

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