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Blackstone offers to sell Universal Studios stake

Wed, 03/16/2011 - 8:15am
The Associated Press

NEW YORK (AP) — Private equity firm Blackstone Group LP is offering to sell its 50 percent interest in two Universal Studios theme parks back to NBC Universal Inc.

Universal City, which does business as Universal Orlando, reported in a Monday filing with the Securities and Exchange Commission that NBC Universal has until June 12 to accept the offer.

NBC Universal owns the nation's fourth-ranked TV network, NBC; the Universal Pictures movie studio and related theme parks; and a bevy of cable TV channels including Bravo, E! and USA.

Universal Orlando's theme parks include Universal Studios Florida and Universal's Islands of Adventure, which houses The Wizarding World of Harry Potter. The company said during a Tuesday conference call that it has benefited from the sale of Harry Potter-themed products and exclusive vacation packages featuring early entry to the Harry Potter attractions.

If NBC Universal rejects the offer, Blackstone will have 270 days to sell the Florida theme parks to a third party, the filing said.

NBC Universal said in a statement: "We are studying the proposal and considering our options."

Comcast Corp., the biggest U.S. cable TV company, took control of NBC Universal in January. It has a 51 percent stake in the company. General Electric Co. owns the remaining 49 percent interest.

The action prompted Moody's Investors Service to change its outlook for Universal City Development Partners Ltd. to "developing" from "stable."

Moody's said Tuesday that the outlook change accounts for the fact that "Blackstone's action could result in a wide range of potential ownership, leverage and rating outcomes for Universal Orlando over the next 12-18 months."

The ratings agency also said that director Steven Spielberg, who has a consulting agreement with Universal Orlando, may have the right to sell his agreement to a potential third-party buyer. Moody's said starting in June 2017 Spielberg has the right to end the consulting deal and receive a one-time payment equal to fair market value of his stake in the parks and all other "comparable projects."

Blackstone Group, which owns SeaWorld in Orlando, Fla., manages $140 billion in a portfolio of real estate, hedge funds, private equity and related businesses.

In February, the New York company reported its best quarterly earnings result in nearly four years.

Blackstone's stock fell 38 cents to $16.20 in midday trading on Wednesday.

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