Comcast break-up plans spark M&A speculation: ‘They can be more nimble’

See more of our coverage in your search results.

Comcast’s decision to spin off NBCUniversal is expected to unleash a fresh round of takeover speculation, with industry insiders predicting the entertainment giant could emerge as one of Hollywood’s most attractive acquisition targets while also gaining the freedom to pursue deals of its own.

Investors appeared to embrace that possibility, sending Comcast shares soaring as much as 26% Monday after the company unveiled plans to separate its media and technology businesses into two publicly traded companies in a tax-free transaction expected to be completed in about a year.

Under the proposal, Comcast shareholders would own shares in both companies.

The standalone NBCUniversal will house NBC, Universal Pictures, Peacock, Sky, Telemundo, Bravo and the company’s growing theme parks business, while the remaining Comcast will focus on broadband internet, wireless and business services.

Comcast said the split would allow each company to pursue its own strategic priorities as consumers continue shifting from traditional cable television to streaming.

Derek Reisfield, co-founder of MarketWatch and a former CBS executive, said NBCUniversal’s biggest advantage as a standalone company is that it can use its own stock as acquisition currency.

“They can be more nimble and can buy other companies using their cash and their stock,” he told The Post.

He said NBCUniversal is likely to pursue additional content and distribution assets, identifying companies such as Lionsgate and Starz, along with European media businesses, as the types of assets that could complement its existing portfolio.

But Reisfield also believes NBCUniversal could become a coveted prize itself.

He identified Amazon, Google and Sony among the potential wild cards that could eventually see strategic value in acquiring the company, though he cautioned that any mega-deal would face significant regulatory hurdles.

Comcast is playing any potential M&A plans close to the vest so far.

Asked on a Monday call whether the break-up should be viewed as a step toward “potential strategic transactions” for either Comcast or NBCU, Roberts said, “Absolutely not.”

The separation will leave NBCUniversal navigating an increasingly fraught political landscape on its own.

President Trump has repeatedly blasted NBC’s news programming and publicly feuded with Comcast CEO Brian Roberts, calling him a “pathetic Loser” and saying Comcast and Roberts are “a disgrace to the integrity of Broadcasting.”

Roberts, however, will remain actively involved in the leadership of both Comcast and NBCUniversal after the separation, even as Mike Cavanagh takes over as chief executive of the standalone media company.

Kaivan Shroff, a media and cultural commentator, said he sees no evidence politics drove Comcast’s decision to split the businesses but argued an independent NBCUniversal could face even greater scrutiny from Washington.

“I don’t think there’s evidence that Donald Trump drove this proposed separation,” he said.

“The business rationale is substantial enough on its own.”

Still, Shroff said a standalone NBCUniversal would likely become “easier to target as a media company rather than one division inside a much larger corporation.”

“My instinct is that NBCU is more likely to become an acquisition target than a major acquirer,” Shroff said.

“Today, there simply aren’t many entertainment companies left with that kind of collection of assets, so I think investors will spend more time speculating about who might eventually want to buy NBCUniversal than about what NBCUniversal wants to buy.”

The remaining Comcast, meanwhile, becomes a far simpler company for Wall Street to value, as it focuses almost entirely on broadband internet, wireless and business communications.

“Instead of trying to explain a business that owns movie studios, television networks, streaming services, broadband, wireless, and theme parks all at once, now investors will be looking at a company focused primarily on connectivity,” Shroff said, adding that investors often reward that kind of clarity.