LOS ANGELES, Oct. 9 (UPI) -- General Electric's NBC television network is close to acquiring the Spanish-language Telemundo network in a $2.1 billion deal that some analysts are skeptical about, it was reported Tuesday.
The Los Angeles Times said NBC was offering cash and GE stock for the network, the second-largest Spanish network in the nation. NBC would also assume $700 million in Telemundo debt.
"If the current owners of Telemundo -- Sony, Liberty Media and Council Tree Hispanic Investors -- get $2 billion or $2.7 billion, they're going to be incredibly happy," David Joyce, senior equity analyst with the Miami investment banking firm Guzman & Co, told the newspaper. "That's quite a return."
There was no immediate comment from NBC or Telemundo, however the Times said NBC was the only suitor left after initial interest from the Viacom and Disney, the respective parent companies of CBS and ABC.
Analysts told the Times it appeared the $3 billion asking price for Telemundo was too rich for Viacom and Disney, particularly since Disney had received some jaundiced reactions from Wall Street after agreeing to pay more than $5 billion last July for the Fox Family network.
Analysts also saw a Telemundo acquisition as more of a strategic move by NBC to gain a foothold in the rapidly growing Latino market rather than something that would produce an immediate pay-off in terms of revenues and enthusiasm on the stock market.
Although Telemundo is the second-largest Spanish network in the nation, its ratings run well behind Los Angeles-based Univision. There are also limited immediate possibilities for cross programming due to the language differences between Telemundo and NBC shows.
Still, Telemundo is available to 85 percent of the Spanish-speaking households in 64 U.S. markets, and the Times said the Miami network's low ratings would keep NBC below the federal regulatory threshold that prevents companies from owning stations that reach more than 35 percent of the country.
