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September 27, 2010 6:32 PM

Gibson Dunn, Debevoise Advise as Vivendi Sells $2 Billion NBCU Stake to GE

Posted by Julie Triedman

French media conglomerate Vivendi S.A. has sold a portion of its stake in NBC Universal to General Electric for $2 billion. The deal announced on Monday is part of the joint venture agreement announced last December between cable company Comcast and NBC Universal-General Electric. That agreement required Vivendi to sell its 20 percent stake in NBC to GE in a series of transactions.

In this first round, GE acquired a nearly 8 percent stake for $2 billion; the remaning 12.34 percent of NBC owned by Vivendi will be sold to GE for $3.8 billion after the Comcast/NBC deal closes.

As we reported last December, Gibson, Dunn & Crutcher is advising Vivendi on the sale. The firm's team is led by M&A partner Ruth Fisher, who negotiated a guarantee in December that if Comcast and GE failed to get regulatory approval of the overall deal by September, GE would have to purchase a part of Vivendi's stake. Also on the deal from Gibson Dunn:  M&A cochair Dennis Friedman and associates Sheera Jacobs and Jessica Lau in New York and tax associate Afshin Beyzaee in Los Angeles. 

Vivendi also was represented by its in-house legal team, including George Bushnell, senior vice president and deputy general counsel, and Debra Ford, director of corporate transactions.

GE continues to be advised by Debevoise & Plimpton M&A partner Jeffrey Rosen, with the assistance of corporate partner Kevin Schmidt, tax partner David Schnabel, and associates Michael Diz and Shelby Parnes. All the attorneys are based in New York. 

Under the agreement, Vivendi won't sell GE its remaining 12.3 percent until Comcast and GE clear all the required regulatory hurdles. Both parties are hoping to close the deal by the end of the year, but lawyers with knowledge of the joint venture say there is a regulatory bottleneck right now, particularly at the Federal Communications Commission.

That is probably because the NBCU deal is the "800-pound Peacock in the room," according to Multichannel News; the deal is seen as a litmus test of the Obama Administration's policies regarding the treatment of online access to video content, a major focus of concern for content companies. Both the DOJ and the FCC have made it clear they are looking at access to online video in their review. 

Comcast is looking to communications, media, and privacy chair Michael Hammer at Willkie Farr & Gallagher for FCC regulatory advice, and to Davis Polk & Wardwell litigation partners Arthur Burke, Ronan Harty, and counsel Stephen Pepper for antitrust guidance. GE is looking to Arnold & Porter for antitrust advice.

In addition to the FCC and antitrust lawyers, Comcast has opened its checkbook to more than a dozen lobbying groups, including four law firms, in an effort to influence political and regulatory opinion, The New York Times reported on Sunday. Data collected by OpenSecrets.org shows that Comcast has paid $6.9 million to lobbyists as of June. Blank Rome, Bryan Cave, DLA Piper, and LeClairRyan are among the law firms receiving tens of thousands of dollars of lobbying fees from Comcast in the first half of this year. GE, for its part, spent $250,000 on lobbying related to television, movies, and music, tapping Greenberg Traurig and Polsinelli Shughart.

Some lobbyists have said they expect the deal to go through by years-end, but it would almost certainly contain several conditions, according to Multichannel News.

Meanwhile, lawyers for Weil, Gotshal & Manges--including capital markets head David Lefkowitz and partner Boris Dolgonos--were putting the final touches this weekend on NBCU's multipart debt offering, money that will help pay for the deal, Bloomberg reported. NBCU's current debt offering is valued at at least $2 billion, according to market reports; it last went to the debt markets with a $4 billion offering in April. The company needs some $9.1 billion to finance the deal. 

 

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