NBC Uni to get a grip on options

Multiple events involving key players set for Friday

NEW YORK -- Wall Street bets are increasingly on Comcast to pull off a deal in the coming months that would see the largest U.S. cable operator take a 51% controlling stake in NBC Universal -- if Vivendi sells its 20% stake, that is.

While Vivendi will only make its intentions clear in a month or two, on Friday investors will look for a bit more clarity on other moving parts surrounding a potential Comcast deal given no fewer than three events involving key or potential players in the NBC Uni M&A game.

General Electric, which controls an 80% stake in NBC Uni, holds its third-quarter earnings call starting 8:30 a.m. that morning, and CEO Jeff Immelt is likely to get questions about whether he is indeed finally ready to sell an asset that he has always called a good business that he wants to hang on to. But analysts have often argued NBC Uni doesn't fit naturally into the industrial conglomerate, and GE executives now seem to focus on indeed exiting their NBC Uni investment over several years.

GE hasn't commented in much detail to date, beyond saying it is keeping its options open. But the fact that it emerged this week that a potential Comcast deal would include an option for GE to put part of its remaining 49% stake to Comcast after 3 1/2 years and the rest after seven shows that the industrial giant is seriously considering an exit that would allow it to maximize value over time.

"We would have preferred to see better timing on the deal, as it comes at a time when media valuations are depressed," Sanford C. Bernstein analysts said in a report Tuesday. But by selling NBC Uni over several years would allow GE to potentially cash in on rising valuations.

While the GE earnings call goes on this Friday, John Malone's Liberty Media will kick off its annual investors' meeting in midtown Manhattan that is scheduled to run 9 a.m.-1 p.m..

Chairman John Malone is the only major industry player who hasn't shown his cards on NBC Uni so far. Liberty looked at buying the company a few years ago, but Malone and CEO Greg Maffei are believed to not be interested in using huge amounts of cash for a possible bid. Instead, the always-opportunistic Liberty seems to be waiting in the wings in case a chance opens up to buy out Vivendi's 20% stake in NBC Uni. Investors will press its leaders for more clarity on their game plan Friday.

Across town, chairman and CEO Rupert Murdoch and his troops will at 10 a.m. open News Corp.'s annual shareholder meeting. Insiders have said the conglomerate is unlikely to be a player in the NBC Uni deal dance, but some involved have kept its name in play -- whether to make things look more like a horse race or because one never knows with Murdoch. Investors will be curious to hear what the often-outspoken media tycoon or his president, COO and vice chairman Chase Carey, has to say.

One Wall Street observer not involved in the deal said at this stage Comcast seems best positioned to seal a deal. "No other real contenders have emerged," he said. "It's theirs to lose now."

GE continues to keep open the option of an IPO or other partnership in the event Vivendi decides to sell but a Comcast deal can't be sealed. Immelt signaled as much this month during a trip to India.

Vivendi's board meets Wednesday and is expected to bring up the Comcast-NBC Uni deal -- but make no public statement on the subject -- while it makes a final decision on a nearly $3 billion bid for Brazilian telecom firm GVT.

With Spanish telecom giant Telefonica having handed in a trumping $3.7 billion offer, Vivendi may pull its bid off the table, which would lessen its immediate need to raise money by cashing out of NBC Uni this year.

But Wall Street folks expect Vivendi will remain on the telecom acquisitions hunt and could therefore decide during its official annual option window -- running for several weeks starting on Nov. 15 -- to sell its NBC Uni stake for what analysts expect to be $5 billion-$6 billion.
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