French media group Vivendi will not receive any cash upfront from a $5.8 billion sale of its stake in broadcast group NBC Universal to majority owner General Electric, the Financial Times reported.
The FT, citing people close to the situation, said US conglomerate GE would delay payments until late next year at the earliest for the stake purchase, which is needed for a NBCU joint venture GE plans with cable operator Comcast.
A source familiar with the matter told Reuters this week the two parties had agreed in principle a price of $5.8 billion, but the payment schedule was then unclear.
Previously, while the parties were in negotiations over the price, Vivendi had agreed to accept payment for one third of its stake until the Comcast deal closed, according to a source familiar with the situation.
But the FT reported that, under the terms of the agreed deal, Vivendi would receive $5.8 billion in cash once the Comcast transaction closed, which it said could take more than a year due to regulatory reviews.
However, if the deal has not closed by the latter part of 2010, Vivendi would be entitled to a payment of up to $2 billion from GE, the paper said, citing people familiar with the situation.
UBS analyst Polo Tang said in a note that, if correct, the agreement would mean leverage would remain high, possibly limiting scope for further acquisitions, but said ratings agencies could look beyond this if there was good visibility on the payments. (Reuters)