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French media company Vivendi mum on possible NBC Universal sale

October 14, 2009 | 12:14 pm

The board of French media and telecommunications company Vivendi convened today in Paris for a lengthy board meeting, but the company would not say whether it had decided to shed its 20% stake in NBC Universal.

LEVY Vivendi has time. The window on whether to exercise its option to sell its interest in the U.S. media company -- which owns the NBC broadcast network, Universal Pictures movie studio, theme parks, Spanish-language television network Telemundo and such profitable cable channels as USA, Bravo, MSNBC and CNBC -- officially opens Nov. 15. Vivendi has until Dec. 10 to make its intention known to majority owner General Electric Co., when the window closes for another year. 

Alternatively, Vivendi could decision to hold on to its stake.

"They should keep quiet. You do not want to reveal your hand to the other parties until you have to, and we are still a month away from the opening of the liquidity window," said Claudio Aspesi, a media analyst with Sanford C. Bernstein & Co. in London.  "Why commit to a course of action now, when you have time to decide?"

GE, which owns 80% of NBC Universal, would like Vivendi to make its wishes known sooner rather than later. GE has been negotiating with cable television operator Comcast Corp. of Philadelphia to acquire the controlling interest in NBC Universal. Under the deal being discussed, Comcast would own 51% of the company and GE would hold the remaining 49%. After years of being one of NBC Universal's biggest cheerleaders, GE Chief Executive Jeffrey Immelt has concluded that with several of the NBC Universal businesses struggling, it is time to take a less prominent role in show business.

So far, GE appears to have been negotiating only with Comcast -- and that might be giving Vivendi some concern. The French company wants to make sure that it gets the best possible price for its stake, and single-bidder auctions typically don't yield the highest price.

Vivendi would like to see some other potential buyers emerge, which could help drive up the bids. But one of the most-often mentioned buyers, Time Warner Inc., has made it clear that it is not interested.  Others are watching to see whether Colorado-based cable pioneer John Malone steps in to try to pick up some of the NBC assets. 

People familiar with the situation say that Vivendi would like to unload its stake, and that it privately indicated to GE in July that this would probably be the year that it exercises its option. Since then, however, Vivendi's ambitions to acquire a Brazilian phone company have been dealt a huge blow by the emergence of a Spanish company offering more money. If Vivendi concedes defeat in the Brazilian auction, it no longer has a pressing need for billions of dollars in cash.

The proposed Comcast deal would value Vivendi's 20% stake in NBC Universal at about $6 billion -- a price tag that the French company deems too low, according to people familiar with the matter. It is now up to GE to figure out a way to make Vivendi happy.

-- Meg James

Photo: Vivendi Chief Executive Jean-Bernard Levy. Credit: Francois Mori / Associated Press