French conglomerate Vivendi decided to hang on to its 20% stake in NBC Universal, informing NBC U parent General Electric that it will not exercise its option to sell the interest.
Vivendi sold Vivendi Universal -- consisting of cable networks Sci Fi Channel and USA Network and movie studio Universal Pictures -- to GE in 2004 for $14 billion, including a 20% interest in the newly formed NBC U. As part of that deal, Vivendi had the right to sell its 20% stake back to GE beginning in January 2007.
In a press release Thursday, Vivendi said it modified its agreement with GE and NBC U, extending its right to call for an initial public offering of NBC U and of GE’s right to acquire Vivendi’s interest in the programming giant.
According to the release, Vivendi can demand an IPO each November from 2007-16. GE has the right to call Vivendi’s interest in the unit each May from 2011-17 for a minimum price of $8.3 billion. That floor price will increase each year beginning in May 2009 based on the U.S. Consumer Price Index.