Just read this:
http://www.orlandosentinel.com/business/orl-bizuniversal13011305jan13,1,6289293.story?coll=orl-business-headlines&ctrack=1&cset=true
GE to keep Universal -- for now
The company has pledged not to sell its stake in the resort for at least another year.
By Sean Mussenden | Sentinel Staff Writer
Posted January 13, 2005
General Electric Co. has locked itself into the volatile theme-park business for another year, promising not to sell its share of Universal Orlando at least until 2006, according to company documents.
The industrial giant became a co-owner of the two-park resort last year when NBC -- a GE subsidiary -- merged with the entertainment unit of Vivendi Universal in a $14 billion deal.
Under an old agreement between GE and Blackstone Group -- the New York private-equity firm that owns the other half of Universal Orlando -- either company could have bought out the other's share after Feb. 1, 2005.
A new agreement, filed with the U.S. Securities and Exchange Commission, will prevent both companies from selling their stakes to each other -- or to another company -- until after Jan. 1, 2006.
After completing the merger in May, GE executives talked favorably about Universal's worldwide theme-park business. Months earlier, they had raised the possibility of selling the parks, citing an industrywide travel slump.
Analysts and company insiders predicted at the time that GE, a tightly managed company, would not have the stomach for the capital-intensive and fluctuating theme-park business. The parks would eventually go up for sale, they said.
The new agreement -- and the fact that the Orlando parks are poised to turn their first profit in four years -- has done little to alter that sentiment.
"My guess is still that GE will eventually sell," said longtime media analyst Harold Vogel, owner of Vogel Capital Management, a venture-capital and trading fund in New York. "But they're in no rush to do it."
The extended agreement will give Universal Orlando another year to improve its financial health, making it more attractive to potential suitors, analysts said.
The parks have been in the red since 2000, losing $87 million in 2001, and $52 million in 2002 and again in 2003, according to company financial statements. As the tourism industry began to recover in 2004, the parks got on track to turn a profit for the first time in years.
Full 2004 numbers are not yet available. Through the first three quarters of 2004, the parks made $24 million; they lost $33 million during the same period in 2003, according to company filings.
It's not apparent what Blackstone or GE will do next year. An NBC Universal spokesman could not be reached for comment Wednesday.
"It's very unclear what will happen at that point. Clearly, we're committed to holding it for a longer term," Blackstone spokesman John Ford said.
Local park officials said the agreement, filed last month as part of a restructuring of Universal Orlando's debt, indicates that both companies are pleased with the turnaround.
"Now we need to focus on the future and growing our business," Universal Orlando spokesman Tom Schroder said.
Sean Mussenden can be reached at smussenden@orlandosentinel.com or 407-420-5664.
Any thoughts???
http://www.orlandosentinel.com/business/orl-bizuniversal13011305jan13,1,6289293.story?coll=orl-business-headlines&ctrack=1&cset=true
GE to keep Universal -- for now
The company has pledged not to sell its stake in the resort for at least another year.
By Sean Mussenden | Sentinel Staff Writer
Posted January 13, 2005
General Electric Co. has locked itself into the volatile theme-park business for another year, promising not to sell its share of Universal Orlando at least until 2006, according to company documents.
The industrial giant became a co-owner of the two-park resort last year when NBC -- a GE subsidiary -- merged with the entertainment unit of Vivendi Universal in a $14 billion deal.
Under an old agreement between GE and Blackstone Group -- the New York private-equity firm that owns the other half of Universal Orlando -- either company could have bought out the other's share after Feb. 1, 2005.
A new agreement, filed with the U.S. Securities and Exchange Commission, will prevent both companies from selling their stakes to each other -- or to another company -- until after Jan. 1, 2006.
After completing the merger in May, GE executives talked favorably about Universal's worldwide theme-park business. Months earlier, they had raised the possibility of selling the parks, citing an industrywide travel slump.
Analysts and company insiders predicted at the time that GE, a tightly managed company, would not have the stomach for the capital-intensive and fluctuating theme-park business. The parks would eventually go up for sale, they said.
The new agreement -- and the fact that the Orlando parks are poised to turn their first profit in four years -- has done little to alter that sentiment.
"My guess is still that GE will eventually sell," said longtime media analyst Harold Vogel, owner of Vogel Capital Management, a venture-capital and trading fund in New York. "But they're in no rush to do it."
The extended agreement will give Universal Orlando another year to improve its financial health, making it more attractive to potential suitors, analysts said.
The parks have been in the red since 2000, losing $87 million in 2001, and $52 million in 2002 and again in 2003, according to company financial statements. As the tourism industry began to recover in 2004, the parks got on track to turn a profit for the first time in years.
Full 2004 numbers are not yet available. Through the first three quarters of 2004, the parks made $24 million; they lost $33 million during the same period in 2003, according to company filings.
It's not apparent what Blackstone or GE will do next year. An NBC Universal spokesman could not be reached for comment Wednesday.
"It's very unclear what will happen at that point. Clearly, we're committed to holding it for a longer term," Blackstone spokesman John Ford said.
Local park officials said the agreement, filed last month as part of a restructuring of Universal Orlando's debt, indicates that both companies are pleased with the turnaround.
"Now we need to focus on the future and growing our business," Universal Orlando spokesman Tom Schroder said.
Sean Mussenden can be reached at smussenden@orlandosentinel.com or 407-420-5664.
Any thoughts???
