CABL Forum - Comcast & NBC

knew Comcast was gonna make some major moves..talks starting up..not much help to us dawgs tho...

By Paul Thomasch and Yinka Adegoke

NEW YORK, Oct 1 (Reuters) - Comcast Corp (CMCSA.O) and General Electric Co (GE.N) are in talks that could lead to the sale of part or all of NBC Universal to the U.S. cable service company, two sources close to the negotiations said on Thursday.

Comcast shares dropped 7 percent after the news, which comes after weeks of speculation about the fate of NBC Universal, owner of broadcast TV network NBC, theme parks, the Universal Pictures studio and cable channels like Bravo, USA and CNBC. GE shares fell 2 percent.

GE, which owns 80 percent of NBC Universal, is considering a host of proposals for NBC Universal as partner Vivendi SA (VIV.PA) explores whether to sell its 20 percent stake. A sale to Comcast is one possibility, one of the sources said, as is the sale to another buyer or an initial public offering.

One Comcast shareholder, Glenn Greenberg of Chieftain Capital Management, said it was unlikely that Comcast would be in a position to make a bid for all of NBC Universal.

"It doesn't surprise me they'd be involved in any talks going on. They've expressed their interest in owning more cable programming properties," said Greenberg, whose fund owns 29 million shares.

"But I do not believe they'd be interested in doing a $20 billion or $30 billion deal to buy all of NBC Universal," he said.

Vivendi and General Electric declined to comment on the talks. Comcast also declined to comment, though it did officially deny a report by website Wrap.com that surfaced late on Wednesday that it had already struck a deal to buy NBC Universal for $35 billion [ID:nN30231454].

Time Warner Co. (TWX.N), which has often been linked to interest in NBC Universal, would rather avoid the burden of the poorly performing NBC broadcast TV network, a third source close to the situation said.

Time Warner already owns Warner Brothers. However, the cable channels would prove attractive, adding to its current lineup of TBS, CNN, and HBO, among others.

Shares of most media companies fell with the broader market on Thursday, with the exception of Time Warner, which rose 1.9 percent.

BREAKING UP NBC

Vivendi's stake in NBC Universal is probably worth $4 billion to $6 billion, analysts have said, and the whole unit could fetch between $20 billion and $30 billion. That would be a significant undertaking for any company in the current media climate, where spending cutbacks by advertisers and consumers have cut into revenue.

One possibility is that Comcast could purchase Vivendi's 20 percent stake in NBC Universal and later swap that for full ownership of its cable network properties. That would be a more affordable deal, and allow Comcast to stay out of the less attractive broadcast TV business.

Under that scenario, GE could keep the broadcast network, parks and studio or sell them separately .

The NBC broadcast network could prove a sticking point for buyers other than Comcast and Time Warner.

Antitrust issues would probably make any deal with the owner of another broadcast network nearly impossible, probably ruling out, for instance, News Corp (NWSA.O), owner of Fox, and Walt Disney Co (DIS.N), owner of ABC.

Cablevision Systems Corp (CVC.N) is expected to sell its cable networks at some stage, making it an unlikely buyer for NBC Universal. Dish Network Corp (DISH.O) and EchoStar Corp (SATS.O) were also considered longshots.

Still, chances that NBC Universal, or at least part of it, could be up for grabs made for a frenzied round of name-that-company in the media industry on Thursday.

Sony Corp (6758.T), facing its own challenges in selling TVs and devices, Microsoft Corp (MSFT.O), which has little strategic reason to get into traditional media, and phone companies like AT&T Inc (T.N) and Verizon Communications Inc (VZ.N) were all talked about by analysts and investors.

If Vivendi decides to sell, it has the right to exercise a sell option each fall until 2016, GE could simply decide to buy the shares and control 100 percent of NBC Universal. It could also decide to sell that stake in a public offering [ID:nN21282076].

In a research note, Craig Moffett, an analyst with Bernstein Research, called those the least likely outcomes.

"We believe that GE's first preference is for a third party -- either strategic or private equity -- to take out Vivendi's 20 percent ownership stake should they exercise their exit option," he said in a research note.

Comcast shares were down 6.34 percent at $15.81, and GE were down 1.89 percent at $16.11 on the New York Stock Exchange. (Additional reporting Anupreeta Das in New York, Scott Malone in Boston and Dominique Vidalon in Paris; Editing by Derek Caney)

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Comcast & NBC