GE Believes Vivendi Will Sell

It’s nice when other outlets further news first broken by Broadcasting & Cable. We first told you on September 9 that General Electric is paving the way for a possible change in ownership structure at NBC Universal and that the “Vivendi situation,” was forcing GE’s hand. “It may not be a strategic sale, it may be a public offering, but no decision has been made,” our sources told us back then.
Tonight the New York Times is reporting that executives at General Electric believe that Vivendi will exercise its right to sell their stake in NBC Universal. It would certainly be odd for GE to be quietly sounding out the options if CEO Jeff Immelt didn’t think Vivendi would finally sell out this year.
Speaking at the Goldman Sachs media conference, Vivendi CEO Jean-Bernard Levy appeared to give the biggest hint yet that an IPO is indeed in the cards if a deal can’t be reached. Speaking on the future of the company’s 20% stake in NBC Universal, he told investors: “An IPO is possible, if we do exercise the put option we go and prepare for an IPO. Unless GE uses a pre-emption right and buys us out at a price.”
“Last year there was turmoil and we didn’t know where the market was going and the advertising market was not in our favor. The next window is in a little more than two months, you will know more at that time.”
“It can go that GE buys us out or at the end of several months the company goes public, assuming we do exercise. But you understand a decision has not been made.”
Tonight The Times reports that G.E. executives are operating under the assumption that Vivendi will exercise its right to sell its share, and its investment bankers at JPMorgan Chase have been looking at proposals to help G.E. decide whether to buy Vivendi’s stake or get the I.P.O underway, a process that could take up to six months.
When I asked Levy if any decision had already been communicated to GE, he declined comment but said it was a decision not simply for him but for the board of Vivendi, and that the board would meet soon to discuss the situation. He declined to say precisely when that meeting would occur.
The Times quotes Nicholas P. Heymann, an analyst at Sterne, Agee & Leach, a GE investor, as saying their expectation is for a Vivendi exit. “Our best guess is most likely, yes,” said “I think that certainly the probability for that is rising and more likely, more likely than not.”