Posted: Feb 12, 2013 4:13 PM by Associated Press
LOS ANGELES (AP) - Comcast said Tuesday that it's buying General Electric's 49 percent stake in the NBCUniversal joint venture for $16.7 billion several years early, as the company takes advantage of low borrowing costs and what CEO Brian Roberts called a "very attractive price."
At the same time, the company said it would raise its annual dividend 20 percent to 78 cents per share and buy back $2 billion in shares this year.
Comcast shares jumped $2.93, or 7.5 percent, to $41.90 in after-hours trading. GE shares rose 76 cents, or 3.4 percent, to $23.34.
Comcast Corp. had bought a majority stake in the television and movie company in 2011. It had planned to take a larger stake in it over seven years, paying for it from operating cash.
But Roberts told The Associated Press that the sale of its stake in pay TV network A&E and some wireless spectrum gave it plenty of cash on hand. He also says Comcast got a good deal given that the stock price of media conglomerates has been rising.
"We thought that we would have to pay more later," he said.
In a statement, Roberts added that "our decision to acquire GE's ownership is driven by our sense of optimism for the future prospects of NBCUniversal and our desire to capture future value that we hope to create for our shareholders."
Comcast had bought a 51 percent stake in NBC Universal, home of the NBC television network, from General Electric Co. for $13.8 billion in cash and assets. It came after the government approved Comcast's takeover of NBCUniversal with conditions intended to prevent it from keeping NBC programming to itself at the detriment of other cable operators and video websites.
Comcast, which is based in Philadelphia, is the nation's largest cable TV operator.
(Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)
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