Will Comcast acquire NBC?

Conglomerate denies deal rumors

By CYNTHIA LITTLETON

The swirl of speculation about NBC Universal's future grew intense late Wednesday amid a report that Comcast is in talks to acquire some or all of the Peacock.

Comcast denied a report posted on the Wrap Wednesday evening that a deal had been reached for the cable giant to buy NBC U.

"While we do not normally comment on M&A rumors, the report that Comcast has a deal to purchase NBC Universal is inaccurate," Comcast said in a statement. NBC U declined comment.

Still, there was evidence that some discussions are taking place between the two companies, but the intentions on either side are far from certain.

What is clear is that that NBC U's fate is very much up in the air and will likely remain so for another few months until former Universal owner Vivendi decides what it wants to do with the 20% stake in NBC U that it retained after it sold the bulk of Universal to NBC parent General Electric in 2004.

Wall Street is valuing NBC U at around $20 billion, meaning that Vivendi's stake is worth about $4 billion (Daily Variety, Sept. 17).

Vivendi has until late November-early December to decide whether it wants to exercise an option that would force GE to buy out that stake or sell off its stake to the public in an IPO. The many what-if scenarios have set Wall Street tongues clacking about the Peacock and GE's future, even as GE continues to deny its interest in unloading its media and entertainment assets. Among the other rampant rumors in the past few months is that the newly cash-rich Time Warner is looking to acquire NBC Universal.

NBC U's attractiveness to Comcast is obvious thanks to its strong portfolio of cable channels including USA Network, Syfy, Bravo, Oxygen, MSNBC, CNBC and the Weather Channel. Ironically, the NBC broadcast network and its O&O stations are probably the least attractive assets that the Peacock brings to the table.

And Comcast has made no secret of its interest in getting deeper into showbiz. The Philadelphia-based company mounted an unsolicited -- and ultimately unsuccessful -- $66 billion takeover bid for Disney in early 2004, and it teamed with Sony Pictures and several private equity shingles in a $5 billion buyout of MGM in 2005. (Comcast continues to hold a 20% stake in the Lion.)

But a union of Comcast and NBC U would also face numerous regulatory hurdles -- starting with anti-trust concerns about one company controlling too many media assets in large markets. Comcast is the nation's largest cable operator with nearly 24 million subscribers in 39 states.

(Michael Schneider contributed to this report.)