NBC Is Not For Sale, Again (GE)

Industrials

Published: October 30, 2007 5:06 am

Between taking pot shots at Apple’s (AAPL) pricing model, NBC Universal CEO Jeff Zucker said that his unit of GE (GE) is not for sale. Period. Under any circumstances.

Referring to what he has been told by his boss, Jeff Immelt, Zucker pointed out to Reuters that "He has said numerous times that NBCU is not for sale. It is not for sale after the Olympics." The Financial Times was rude enough to say that GE might dump its entertainment unit once it made it big profit on the Olympics.

What Zucker may not have noticed is that GE’s stock, after a nice run, has underperformed the S&P for the last quarter. The big growth overseas and improvement in results at it huge infrastructure division have not made a difference to Wall St.

NBC Universal will have revenue of about $15 billion this year, and an operating profit of about $2.5 billion. The Olympics may push that up some. CBS (CBS) has remarkably similar numbers. It has a market cap of $21 billion and $7 billion in debt.

Would GE sell NBC for $28 billion? Maybe not. But, if it had an offer for $30 billion or more, the GE board might take a dim view on passing on the chance to sell a non-core asset for a nice premium

Douglas A. McIntyre

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