It’s a nail-biter: Vivendi will wait until the last minute to decide, or at least to announce, what it plans to do with its 20% chunk of NBC Universal.
But the top exec of the French conglom indicated Wednesday that if NBC U’s majority owner, General Electric, doesn’t pony up billions of dollars, the Peacock could be headed for an IPO — a possibility Wall Streeters and media players have been anticipating for years.
Vivendi will be able to exercise a so-called put option on the stake for a period from mid-November to early December, meaning it could force GE to buy it out. If GE declines, Vivendi would have the right to cash in on the stake through an initial public offering that could bring in hordes of new investors.
Jean-Bernard Levy, chairman of the French conglom, said the company would decide what to do in the next few months — taking it right up to this year’s deadline.
“The next window is in a little more than two months. You will know more at that time,” Levy told investors at a Goldman Sachs media conference in New York.
“An IPO is possible; if we do exercise the put option, we go and prepare for an IPO unless GE uses a preemption right and buys us out at a price,” he added.
Wall Street, Hollywood and, most especially. GE are intensely interested in Vivendi’s plans. The company has had the put option since selling the bulk of NBC Universal to GE in 2004. It retains the option until 2016, so it wouldn’t be forced to act this year.
However, Vivendi has shed most of its U.S. entertainment assets — it still owns Universal Music Group — and Levy recently described the NBC U stake as “noncore.” He also indicated Wednesday that he might have acted last year if financial markets hadn’t been so rocky. A worldwide economic crisis isn’t the best backdrop for an IPO.
NBC U topper Jeff Zucker, who spoke at the Goldman Communacopia conference the day before, declined to comment on the situation other than to say that Vivendi has been a great partner and that Levy would likely give an update during his presentation.
If Vivendi does exercise the put, GE could buy the stake or find another partner to take it. Wall Streeters have valued NBC U at about $20 billion, so 20% would be worth about $4 billion.
GE could also theoretically sell NBC U outright. GE chairman Jeff Immelt has said in the past that’s not likely and that it makes no sense.
Others have questioned the logic of a giant industrial conglom owning an entertainment company.
In any case, the possibility of one of showbiz’s biggest players being put on the block, through a sale or IPO, is keeping biz watchers on the edge of their seats.