NBCU to Sell A+E Networks Stake for $3.03 Billion

Disney, Hearst to be 50-50 partners

NBCUniversal will collect $3.03 billion in exchange for its minority stake in A+E Networks.

In a filing with the Securities Exchange Commission, NBCU parent company Comcast Corp. reported that it will sell its 15.8 percent position in A+E to joint-venture partners Walt Disney Co. and Hearst Corp.

The redemption price will be paid solely in cash although per Comcast’s 8-K filing, “certain limited circumstances” could arise in which payment would be made in cash and in the form of a $1.07 billion senior note issued by A+E.

When the deal closes—it is subject to the approval of federal antitrust officials—Disney and Hearst will each control a 50 percent stake in A+E.

Comcast originally acquired its stake in A+E in January 2011 when it purchased a 51 percent stake in NBCU from General Electric. Analysts believe Comcast is likely to salt away the $3.03 billion in order to buy a greater interest in NBCU. GE is free to sell 50 percent of its remaining interest in NBCU in June 2014 and can cut the final tether connecting it to 30 Rock in January 2018.

“According to our calculations, we estimate that half of GE’s remaining stake would ‘cost’ Comcast $7 billion to $8 billion in 2014,” Marci Ryvicker, an analyst with Wells Fargo Securities, wrote in a July 6 note to investors.

The dollar amount Comcast will take away from the sale implies a total valuation of $19.2 billion for A+E.

The A+E stable includes the cable networks History, A&E and Lifetime—three of the highest-rated properties on the dial.

According to Nielsen, History in Q2 2012 finished third among all basic-cable nets, averaging 2.52 million viewers in prime time, marking a 14 percent increase from the year-ago period. The network improved 2 percent in the adults 18-to-49 demo, averaging 1.04 million, good for second place.

A&E closed out the quarter ranked seventh among adults 18-to-49 (688,000, up 2 percent), while Lifetime finished seventh among women 18-to-49, improving 17 percent versus Q2 2011 with an average prime-time delivery of 350,000.

All told, the three tent poles net nearly $1.5 billion in annual ad sales revenue.