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Asking the Wrong Vivendi Question

There’s been lots of attention paid to Vivendi’s board meeting today as a sign of whether it will sell its 20% stake in NBC Universal and thereby clear the way for the deal I have been reporting onthat is close between GE and Comcast .

But whether Vivendi decides it wants out of its partnership with GE is not the point.

The decision that is central to Vivendi is one it will soon be presented with. GE’s CEO Jeff Immelt will soon offer a deal in which Vivendi will be able to sell its 20% stake in NBCU for roughly $6 billion. Vivendi can then decide whether it wants to take that price or register its shares for sale in an IPO that will take place in 2010 if it decides to go that route this year.

  • GE Exec: Economic Signals 'Better than Expected'

NBCU is being valued at about 11 times EBITDA in the transaction being worked on by Comcast and GE. Talk to any media investors about where an IPO of NBCU might be priced and they’ll tell you somewhere between 7-8 times EBITDA.

What do you think Vivendi is going to do? My guess is they take the offer from GE and never look back, happily collect their money if and when the Comcast GE deal closes.

  • GE Includes Two 'Puts' in NBC Deal With Comcast

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Questions? Comments? Write to faberreport@cnbc.com