NBCUniversal details of Comcast $16.7 billion bid

NBCUniversal buyout was announced by Comcast Corporation (NASDAQ:CMCSA) (NASDAQ:CMCSK) on Tuesday late afternoon EST. Comcast announced that it would purchase all of General Electric Company (NYSE:GE)’s 49% stake in NBCUniversal  for $16.7bn, accelerating the put option time frame. Nomura Research has put out a report with some interesting numbers on the valuation. They estimate that this deal values NBCUniversal  at 9.5x 2013E EBITDA, a 15-20% premium to peer media companies. Some investors argue that the premium is warranted as it buys GE out of a possible future turn-around at NBCUniversal . Nomura estimates that the deal is 15% accretive to earnings and free cash flow. Nomura believes that investors will reward Comcast for getting this deal done, increasing operational flexibility to invest at NBCUniversal  and/or return cash to shareholders.

NBCUniversal Comcast buyout valuation model

Separately, Comcast Corporation (NASDAQ:CMCSA) (NASDAQ:CMCSK) and Fox announced a major programming deal today, which has interesting implications for both companies. Their Fox Network / TV stations deal was up as of 12/31/12, and this deal should be retroactive to last Y/E.

4Q Cable Results Met Expectations

Comcast reported subscriber net additions of 502k, just ahead of the 458k consensus. Net video subscriber losses were just (7k), close to consensus of (5k) losses. Broadband net additions of 341k were ahead of consensus of 329k, and were likely a relief considering the recent Time Warner Cable miss. Voice additions of 168k beat consensus of 135k.

Comcast Corporation (NASDAQ:CMCSA) (NASDAQ:CMCSK)’s Cable business reported revenue of $10.1bn and EBITDA of $4.2bn, in-line with consensus estimates. The EBITDA margin of 41.5% was steady year over year. Advertising revenue of $652mn missed consensus estimates, but rose 19% y/y on political spending. Business revenue grew 33%, as Comcast continues to take share in the small-business market.

Mixed Results at NBCUniversal

NBCUniversal  revenue and EBITDA during 4Q was $6.0bn and $1.2bn, versus consensus at $6.0bn/$1.1bn. Margin strength at Broadcast was well above expectations, with $95mn beating consensus of $21mn. Cable revenue and margin was a disappointment however, missing Consensus estimates.

Share Buybacks for 2013 Lower

Comcast Corporation (NASDAQ:CMCSA) (NASDAQ:CMCSK) repurchased $750mn of stock in 4Q and it paid out $432mn in dividends, meeting expectations. The company returned $4.7bn in 2012, or 92% of cable free cash flow. Comcast announced a 20% dividend increase.