Comcast Corp. (CMCSA:US)’s NBC Universal entertainment business exercised an option to sell a “substantial” portion of its equity in A&E Television Networks, owner of the Lifetime and History cable channels.
NBC Universal, which owns 15.8 percent of the A&E joint venture with Walt Disney Co. (DIS:US) and Hearst Corp., exercised its option on March 26, Philadelphia-based Comcast said yesterday in a regulatory filing (CMCSA:US). A&E will redeem the equity under an existing shareholder agreement. Financial terms weren’t revealed.
Comcast, owner of the biggest U.S. cable system, expects the deal to be completed in the second half of the year, after the three companies agree on the value of NBC’s stake. When NBC Universal, Disney and Hearst merged the Lifetime and A&E cable channels in 2009, the companies said the accord included a provision for New York-based NBC to leave the partnership if it chooses and for Disney and Hearst to become 50-50 owners.
John Demming, a spokesman for Comcast, declined to comment. Zenia Mucha, a spokeswoman for Burbank, California-based Disney, and Abby Alderman, a spokeswoman for closely held Hearst in New York, didn’t return messages seeking comment.
“Under the terms of our existing shareholder agreement, NBC Universal is required to provide a last dollar guarantee of indebtedness that A&E Television Networks may incur to finance the purchase of NBCUniversal’s equity interest,” Comcast said in the filing.
A&E Television Networks, based in New York and overseen by President and Chief Executive Officer Abbe Raven, includes some of the most-watched U.S. cable channels, including A&E, Lifetime and History. The company also owns Military History and Crime & Investigation Network.
The A&E and Lifetime Television channels are among the most widely distributed on U.S. cable television, reaching 99 million homes each, according to Disney’s latest annual report.
Disney’s cable networks, including ESPN and Disney Channel, contributed 46 percent of the company’s revenue and 70 percent of profit in fiscal (DIS:US) 2011. Hearst owns 20 percent of ESPN.
NBC’s cable unit operates the USA Network, the most-watched U.S. entertainment cable channel, as well as E!, Bravo, Style Network, Syfy, Weather Channel, CNBC, Golf Channel, NBC Sports Network and the women’s-oriented Oxygen network.
Comcast slid 3 percent to $29.45 and while Disney fell 2 percent to $42.93 yesterday at the close of trading (DIS:US) in New York. Comcast has gained 24 percent this year, while Disney has climbed 14 percent.
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