Comcast Corp. (CMCSA:US)’s NBC Universal entertainment unit agreed to sell its 15.8 percent stake in A&E Networks to the venture’s co-owners, Walt Disney Co. (DIS:US) and Hearst Corp., for $3.03 billion.
NBC will be be paid in cash and with a senior note issued by A&E, the company said today in a filing. The price implies a $19.2 billion value for all of the company, which includes A&E, Lifetime and the History Channel cable networks.
The sale brings Philadelphia-based Comcast cash it can use to help purchase the rest of NBC Universal, Marci Ryvicker, an analyst with Wells Fargo Securities, said in a July 6 research note. Disney, based in Burbank, California, and Hearst, in New York, gain complete ownership of A&E, which also includes Military History and Crime & Investigation Network.
History Channel’s “Hatfields & McCoys” miniseries, about the famous U.S. family feud, drew record cable audiences in May.
The three-way ownership structure for A&E Networks was created in 2009 when New York-based NBC Universal, Disney and Hearst merged the Lifetime and A&E cable channels.
The accord included a provision for NBC to leave the partnership if it chooses and for Disney and Hearst to become 50-50 owners. Comcast exercised its option on March 26.
Comcast, the largest U.S. cable system, rose (CMCSA:US) 0.3 percent to $31.35 at the close in New York. The shares have gained 32 percent this year. Disney, the world’s largest entertainment company, lost (DIS:US) 1.3 percent to $47.36 and has advanced 26 percent in 2012. Hearst is closely held.
General Electric Co. (GE:US) can sell half of its remaining 49 percent NBC Universal stake to Comcast in June 2014, and the rest in January 2018, according to Ryvicker. She estimates that the 2014 transaction would cost Comcast $7 billion to $8 billion.
Comcast, which valued the A&E stake at $2.02 billion in financial statements as of March 31, has a strategy to sell assets it doesn’t control, according to Ryvicker.
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