Viviendi Keeps NBCU Play Close to Vest

Talk of IPO circulates
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PARIS, FRANCE: NBC Universal could soon be in play. Vivendi’s 20 percent stake in the media company is coming up for put option in November, during which it can either sell NBCU or spin it out. Variety and the Los Angeles Times have reported that Vivendi executives are mulling the option of taking it public with its own IPO. The alternative is for NBCU majority owner General Electric to buy Vivendi’s stake, In the meantime, executives at the French conglomerate are being coy.

“The next window is in a little more than two months. You will know more at that time,” Vivendi chairman Jean Bernard Levy said at a Goldman Sachs media conference in New York, according to Variety. The publication said analysts estimated the value of Vivendi’s 20 percent piece of NBCU at $4 billion. The Timesreported that the total value of the company was estimated by JPMorgan analyst Stephen Tusa at $30 billion to $35 billion.

General Electric (NYSE: GE), with its financial division, has struggled in the recession, its share price reaching a low of less than $6 at one point. Shares have climbed for most of September, from around $13.30 Sept. 1 to nearly $17.50 today.

GE chief Jeffrey Immelt has defended having NBCU in the company portfolio. Before the collapse, last August, Immelt said selling NBCU “doesn’t make sense.”

“The business has outperformed its competition and the GE average for the last 20 years,” Immelt said. “Our diversified content position is very strong. Content is increasing in value in a digital world. We are in a good cycle around the Beijing Olympics, the U.S. elections, and the 2009 Super Bowl.”

At the time, NBCU’s media division was expected to turn in 10 percent earnings growth and as much as 20 percent in subsequent years. That was before the meltdown. NBCU’s second-quarter profit was down about 40 percent compared to last year. The unit reported net income of $539 million for the three months ending June 30, compared to $909 million last year, including special items.

GE’s overall results for the second quarter included net income of $2.9 billion, down 47 percent from the year before, on revenues of $39.1 billion, down 17 percent.

More on NBCU:
July 20, 2009: “NBC Universal Profit Off 24 Percent”
Second-quarter profit for NBC Universal would have down about one-fourth compared to last year if not for special items that nearly slashed the figure in half. The television entertainment unit of General Electric reported a profit of $539 million for the three months ending June 30, compared to $909 million for the same period last year, when NBCU collected $113 million from the sale of Sundance Channel to Rainbow Media. This year, NBCU has taken one-time charges totaling $95 million related to its investment in Ion Media, which is in reorganization.

January 26, 2009: “GE Reports Earnings Plunge”Shares of General Electric (NYSE: GE) slid 10 percent on Friday when the parent company of NBC Universal announced a 43 percent drop in earnings. The Fairfield, Conn., missile-making, television, light-bulb, finance company reported 4Q08 earnings of $3.9 billion on revenues of $46 billion, compared to $6.8 billion on nearly $49 billion for the final quarter of 2007.

August 7, 2008: “GE Says Olympics Cash Cow NBCU is Not for Sale”
“The business has outperformed its competition and the GE average for the last 20 years,” Immelt said. “Our diversified content position is very strong. Content is increasing in value in a digital world. We are in a good cycle around the Beijing Olympics, the U.S. elections, and the 2009 Super Bowl.”