DealZone

GE: bringing small things to life

GENERALELECTRIC/With talk about a multibillion-dollar deal to sell NBC Universal to Comcast burbling away, General Electric CEO Jeff Immelt popped the top on a $250 million venture fund designed to buy stakes in small healthcare technology companies.

“What we’re trying to do is embrace the venture community, try and do a series of early-stage and later-stage type investments,” Immelt said in an interview. “We don’t do everything inside our four walls.”

Competing venture capitalists might consider Immelt’s embrace more of a bear hug. GE is taking a similar approach to the energy industry. It has a stake in A123 Systems, the battery maker that was one of the best-received initial public offerings of the year. Scott Malone, our reporter who interviewed Immelt, notes that taking stakes in smaller companies rather than buying them outright gives GE more flexibility. It gains exposure to a wider array of technologies, any one of which could take off.

“GE is in the midst of a $6 billion drive to revamp its healthcare arm, called ‘Healthymagination,’ that includes rolling out products intended to help hospitals and other health providers cut costs and making investments to encourage the adoption of electronic medical records,” Malone reports.

Might be just cosmetic, but a new name would be a good place to start.

The Playgrounds of Private Equity

Blackstone Group’s plan to buy Anheuser-Busch InBev’s U.S. theme parks for up to $2.7 billion may turn out to be a brilliant expansion into the recession-squelched entertainment industry. But it could also prove to be a roller coaster in terms of value if Americans don’t rediscover fun as part of the economic recovery.

For its part, AB InBev at least has a product that can sell equally well when people are depressed. The deal helps to satisfy its goal of raising $7 billion from divestments.

The theme park deal is one of the largest private equity transactions this year. It will add Busch Entertainment Corp’s 10 parks — including three SeaWorlds and two Busch Gardens — to Blackstone’s existing fun stable housing Madame Tussauds wax museums, Legoland and the London Eye Ferris wheel. mumblings about anti-trust issues, the private equity entertainment empire is active in a buyers market. Some say NBC Universal’s theme park could soon wind up on the block if GE sells content assets to Comcast.

Did he say IPO?

Speaking in New Delhi, General Electric CEO Jeffrey Immelt said “Discussions are ongoing whether it is an IPO or another partnership,” in response to a question on whether GE was talking to Comcast to sell a stake in the fourth-placed TV network and movie studio. With Vivendi possibly just a couple weeks away from unloading its 20 percent stake in the NBC venture, and all the talk this week about Comcast gathering coins to add the content trove to its cable mix, it might seem as if Immelt is trying to conjure something like a rabbit from a hat – or a peacock from a beret.

GE and Comcast are discussing a deal under which the largest U.S. cable firm would take control of 51 percent of NBC Universal with GE, which has the right of first refusal to pick up Vivendi’s stake if the French company exercises its annual option to sell, taking the rest. “The capital markets have definitely improved,” Immelt said. There is reason to see stability and some optimism for the future,” he said.

Set aside for a moment that the sickly advertising market that NBC already faces. The market for IPOs is picking up nicely right now, but is still in an early stage of recovery, making do with a ragtag bunch of real estate investment trusts and Chinese new-market plays. What effect do you think a big media play splashing into that pool would have on investor demand for new issues?

Comcastic consolidation

Expect Comcast to look to small- and mid-sized acquisitions rather than a big deal after winning a court case that struck down a rule limiting the cable company to no more than 30 percent of the U.S. pay-TV market. “Many had thought Comcast’s win would kick-start industry consolidation, but upon reflection Wall Street analysts do not think the No.1 U.S. cable company, which has around 25 percent market share, will have the appetite for major cable deals,” reports Yinka Adegoke.

“We don’t wake up every day saying how do we get bigger in cable,” Comcast Chief Operating Officer Steve Burke said at an investor conference after the court ruling. “But if there is a way to acquire cable systems for what we consider to be a good price, ones that are contiguous or well managed, we would certainly look at whatever was out there.”

Not everyone thinks smaller is better for Comcast. Citi analyst Jason Bazinet, in a note to clients, said Comcast should tie up with Time Warner Cable in a mega media merger. Combined, the companies would control 37 percent of the pay-TV market and could achieve $2.7 billion in cost savings, he said, predicting that shares of both companies would rally on news of a deal.

After March Madness, a little May Rage

SOCCER-ENGLAND/With the end of the economic meltdown so tantalizingly close, and stock markets pricing in the spring thaw, The Consumerist’s annual Worst Company in America competition is just the tonic DealZone readers need to keep their prized sense of perspective appropriately tickled.

“It’s the bailouts versus the monopolies!” the Website’s news release rings out:

The annual 32-company battle royale has whittled itself down to the “final four”: Bank of America, Comcast, Ticketmaster and AIG. One of these disastrous companies will go on to join Halliburton (2006), RIAA (2007) and Countrywide (2008) as “The Worst Company in America.”