Goodbye NBC Universal
Just two weeks ago, Comcast and GE denied the NBC Universal deal (See article below). At the beginning of October we saw Comcast's stock price fall as investors were foreshadowing a possible deal but this week we see GE's profit rise with the announcement that the company will indeed be selling NBCU.
Comcast denies deal for NBC Universal
October 1, 2009
According to reporter, David B. Wilkerson, "entertainment news site The Wrap reported late Wednesday that an agreement had been made in which Comcast would purchase NBC Universal for $35 billion."
However, Comcast denied the report quickly, and both companies declined to comment on whether there had been conversations between the companies. Despite denial though, Comcast's Class A stocks fell due to investors concern of the possibility of such a transaction.
"Investors have long pressed Comcast for an aggressive return of cash to shareholders. An acquisition of a major content studio, even if consummated at an attractive price, is most decidedly not what Comcast investors had in mind," said Craig Moffett, senior cable analyst for Sanford C. Bernstein & Co.
To learn more, check out the full article.
So who is getting the better deal? Well right now it would look like GE, but will it really get the fair value for NBCU? If the company is able to buy back its shares from Vivendi then it looks like we will have an answer to that question quite soon. It will be interesting to see how this deal plays out in the next couple months.
Profits
GE Capital and NBC both saw increased profits this week, but GE Healthcare obviously didn't get the memo. Unfortunately each of these businesses have been hurting during the past year and as seen in other news, NBCU will no longer be a part of GE's portfolio soon. GE Capital and GE Healthcare are of GE's core businesses, so even with suboptimal performance, they won't be going anywhere. Check out this video to see GE's earning report as of 10/16/2009
NBC Universal profit jumps 13% on gain
October 16, 2009
This article by David B. Wilkerson states that "as General Electric negotiates to sell off part of NBC Universal, the entertainment unit posted a 13% increase in third-quarter profit." This increase is due to slashing "costs by eliminating primetime dramas in the 10 p.m. hour."
NBC has really been struggling this past year and this article shows what measures they have taken to increase profits.
To learn more, check out the full article.
Vivendi In Talks to Unload NBC Stake
October 18, 2009
Currently GE owns 80% of NBC Universal while Vivendi owns the other 20%. Recently GE has been working on a potential deal with Comcast, that would give them a 51% share and control of NBC Universal while GE would retain 49% until they could eventually exit the entertainment business.
This article by Sam Schechner and Jeffrey McCracken states that at this time, Vivendi and GE are "about $500 million apart in talks over what Vivendi should be paid for its minority stake" in the company.
This is extremely important because once Vivendi is out of the picture, GE can enter into its deal with Comcast.
To learn more, check out the full article.
US CREDIT-GE Capital debt boosted by stronger GE support
October 19, 2009
Over the past year there has been speculation about whether or not GE will spin off GE Capital. While the Obama Administration is adamant on separating business and commerce, in July 2009, GE was assured that GE Capital would be grandfathered under any such bill.
Although GE Capital has struggled over the past year, the General Electric parent company continues to back them and in the article Karen Brettell reports, that they have once again strengthened their support for them.
To learn more, check out the full article.
Health Debate Freezes Equipment Orders, GE Executive Says
October 20, 2009
With announcements last week that the Senate Finance Committee had passed its version of the healthcare bill, it looks like we may actually have an overhaul of the nation's current system in the near future. This, on top of the recession, according to Paul Glader, has led to the freezing of orders for new medical equipment in General Electric's Healthcare division.
Although this has led to a decrease of 20% in profits and 9% in revenues, chief executive of GE Healthcare, Mr. Dineen, believes that the "global economic-stimulus packages and health-care reform will boost spending on health-care services, information technology and medical records, all big GE businesses."
To learn more, check out the full article.
