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Vivendi: No Decision Yet on NBCU Stake

Vivendi CFO Philippe Capron speaks out amid speculation that Comcast-G.E. deal will be done by Nov. 23 11/19/2009 04:40:00 PM Eastern

GE, Comcast and Vivendi are expected by some to have a deal to create a new company out of NBC Universal and Comcast's cable channels by Monday Nov. 23, but Vivendi CFO Philippe Capron speaking today in Barcelona said the company still has not made a decision about its 20% stake in NBCU.

Speaking at the Morgan Stanley Technology, Media and Telecoms Conference in Barcelona, Spain, Capron is quoted by Dow Jones as saying: "No decision has been taken by our board yet as to the exercise of our liquidity rights option we have and no deal has been struck with General Electric Co. as to another way to exit," he said.

Capron added: "We have never been closer to the end of the story. It's in the future but I can't comment on timing or the likelihood of what will happen."

Comments to Bloomberg also suggest the months-long deal saga that could create a $9 billion TV advertising giant, is not quite at its end. Capron continued, "We are not interested in staying on board a new GE-Comcast ownership of NBCU, so yes we would exit," he said, adding, "This year the situation is a bit more complex. We are not forced to do anything. We could just say no."

Vivendi is believed to be holding out on finalizing the deal until it can extract maximum value for its stake. Back in 2004, when GE acquired the Vivendi Universal Entertainment asset, its owner - Vivendi received a 20% stake which was valued at $44 billion.

Today that same asset has been valued at $30 billion, meaning Vivendi is far from coming out on top given today's depressed prices. Vivendi's stake was on the company's 2008 books at $6.2 billion. One person familiar with M&A transactions, but not involved in the negotiations, suggested that Vivendi is holding out for $7 billion and that any change in the value of Vivendi's stake means the whole entity would have to be revalued. Another person in the investment world, again not involved in talks, suggested that the pressure would be on Comcast to come up with any extra cash rather than GE, which has an option to exit the venture in three to seven years.

When asked by the media if price was the stumbling block Capron responded. "It often is." He also appeared to signal another stumbling block. "This decision that we have to take in the next three weeks is in conflict with the GE-Comcast deal," he said. "We cannot do the deal with Comcast and have an IPO process." Vivendi has until Dec. 10 to make its decision as part of an annual option to sell its stake which runs until 2012.

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