SBD/18/Sports Media

GE DUMPS KIDDER; IS NBC THE NEXT TO GO?

     PaineWebber announced yesterday that they have signed a
"definitive purchase agreement" to take over most of Kidder
Peabody, the troubled investment banking subsidiary of General
Electric, for $670M in common and preferred stock.  The deal ends
GE's troubled eight-year ownership of Kidder, which has been hit
this year by tumbling bond markets and an alleged bond trading
fraud which resulted in fictitious profits of $350M.  The deal
will leave GE with a seat on the board and a 25% stake in
PaineWebber (Richard Waters, FINANCIAL TIMES, 10/18).  In all, GE
officials said the company expects a $500M write-off to cover the
transaction.  But that figure is well under the $1B or more that
some analysts had suggested it would cost to close Kidder
(Douglas Frantz, N.Y. TIMES, 10/18).  John Durie writes GE Chair
Jack Welch may look for a "blockbuster sale to wipe out the
Kidder memory" -- with NBC the prime target. Welch "is aiming for
a sale price of about $5.5 billion, or a capital gain of $2
billion."  Michael Eisner is Welch's "best hope," but a combo of
ITT and a baby bell or John Malone and Ted Turner is possible
(N.Y. POST, 10/18).
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