Vivendi to keep its 20% stake in NBC Universal

French media conglomerate Vivendi plans to keep its 20% stake in NBC Universal -- at least for another year.

Vivendi’s decision Wednesday not to exercise an option to sell its minority interest eases a potential headache for General Electric Co., which owns 80% of the television network, movie studio and theme park business. GE has the right to buy Vivendi’s stake before it is offered to the public.

For GE, the timing would not have been ideal. The Fairfield, Conn.-based industrial giant has stumbled this year, squeezed by the mortgage meltdown, tight credit markets and a weakening economy. Nearly 40% of GE’s revenue comes from its financial services division.

GE’s stock has tumbled more than 50% this year; its shares closed Wednesday at $18.13, up 52 cents.

Four years ago, GE acquired Vivendi’s profitable entertainment assets, which included Universal Studios, Universal Pictures and cable channels USA Network and Sci Fi, in a merger that strengthened NBC’s portfolio and diversified its revenue. At the time, Vivendi received $3.4 billion in cash and the 20% stake.

The deal contained a complicated provision for Vivendi to unwind its holdings at fair market value. Each year, Vivendi faces an early December deadline to notify GE whether the company plans to dispose of its interest.

“It’s not the right time to sell,” said Vivendi spokeswoman Flavie Lemarchand-Wood, citing current market conditions that are forcing the shares of media companies to trade at historically low multiples. Investors are sour on media companies, most of which generate the bulk of their revenues from advertising.

Besides, she said, Vivendi is not in need of cash and has available credit lines of nearly $7 billion.

“And we are very happy with NBCU’s management team,” Lemarchand-Wood said.

NBC Universal declined to comment. In 2007, NBC Universal reported operating income of $3.1 billion on revenue of $15.4 billion.

In a recent report, Sanford C. Bernstein analyst Claudio Aspesi said Vivendi managers probably wrestled over such issues as the state of the market and the value that would be assigned to Vivendi’s stake, about $4 billion.

“The stake has lost about 41% of its value since the date when Vivendi could have first triggered its option,” Aspesi wrote.

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meg.James@latimes.com