COMCAST OUT OF VIVENDI BIDDING,
LIBERTY MEDIA IN RED
After hemming and hawing, cable conglom Comcast Corp. is out of the bidding for Vivendi Universal’s entertainment assets.
The cable conglom, which was invited to make a bid for the French company’s media holdings either by itself or with John Malone’s Liberty Media, has officially taken itself out of the running.
Comcast Corporation is principally involved in the development, management and operation of broadband cable networks, and in the provision of electronic commerce and programming content. As the largest cable company in the United States, it serves more than 21 million cable subscribers, with majority ownership of QVC (which it just acquired) Comcast-Spectacor, Comcast SportsNet, E! Entertainment Television, Style, The Golf Channel, Outdoor Life Network and G4.
That leaves General Electric’s NBC, the front-runner, and a consortium led by former Universal owner Edgar Bronfman Jr., as the two remaining buyers for the House that Messier Built and Fourtou is Trying to Dismantle. Speculation continues that VU may yet be forced to pull its entertainment holdings off the market and prepare it for a possible public offering.
Fourtou now must decide whether he favors a cash bid from the Seagram heir or a merger of Universal with NBC. The network would put up little to no cash and Vivendi would get a stake in the new company and cash out with an IPO. Insiders insist NBC is at the top of Fourtou's wish list..and NBC parent GE is warming to a deal.
"The level of interest at the company has increased since the process began several months ago," noted J.P. Morgan analyst Don MacDougall.
Meanwhile, Malone’s Liberty Media, which also reportedly dropped out of the VU auction, announced Q2 results which showed its losses narrowed to $464 million, from $3.1 billion a year before, when they had to write down $5.13 billion in the value of its investments. Revenue fell from $510 million to $500 million, because of a legal dispute with Comcast over fees paid for carrying Liberty's Starz cable network. Liberty’s Q2 operating loss was $46 million, compared to a profit of $13 million last year. Shares fell 17 cents to $10.97 by the end of trading yesterday.
