Is Comcast Prepping to Buy NBC Universal?

Deal Chatter Dominates as Vivendi Considers What to Do With Its 20% Stake

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NEW YORK ( -- Talk of a Comcast-NBC Universal merger is rampant this morning since Hollywood blog The Wrap reported bankers representing both companies met Tuesday night to discuss a potential purchase of the entertainment company from General Electric.

Jeff Zucker
Jeff Zucker Credit: NBC
Comcast, which doesn't normally comment on acquisition rumors, called the reports "inaccurate," but reports this morning suggested the deal may result in Comcast taking as much as a 50% stake in NBC Universal or buying Vivendi's current 20% stake in the company.

NBC Universal CEO Jeff Zucker, for his part, issued a memo to employees today in which he addressed the rumors, encouraging his staff to go about their day-to-day operations.

"Not surprisingly, given the attractive nature of our assets, there is always significant interest in NBC Universal," he wrote. "That has been amplified lately by the annual discussion with Vivendi about its 20% ownership of our company. Vivendi has been a superb owner of NBC Universal, along with GE, for more than five years. They have not yet made us aware of any final decisions about their future with us; should they choose to exit, there are a number of possible things that could happen. It is our longstanding policy not to comment on rumors, and we have adhered to that policy in connection with these rumors. As distracting as it may be to hear and read about potential changes to our ownership structure, nothing is more important than keeping this company strong."

Media analysts were also in a frenzy to weigh in on everything from initial thoughts on potential synergies to current valuations for NBCU, which has been reported to be worth anywhere from the lowball $21 billion, based onSanford C. Berstein & Co. estimates, to the $35 billion purchase price reported by The Wrap.

In a note to investors issued this morning, Bernstein analyst Craig Moffett wrote, "Comcast's public comments over the past six months have made it clear that their appetite for a content acquisition remains undiminished, so the reports of Comcast's interest in NBCU can be assumed to be credible. Nevertheless, there are many obvious hurdles to a deal, including Comcast's recent comments that they wished neither to issue debt nor equity to finance a transaction."

If Comcast were to purchase NBCU outright instead of take a 50% stake, NBCU's value could be pushed to more than $30 billion, he added.

UBS cable analyst John Hodulik also noted that a Comcast-owned NBC Universal would lead to a potential sea change in digital distribution of TV content, given Cocmast's leadership role in the streaming-content initiative TV Everywhere and NBC Universal's 33% ownership of Hulu. "Comcast management has been relatively clear that it would like to invest in programming assets if the right deal came along," Mr. Hodulik wrote.

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