http://www.latimes.com/business/printedition/la-fi-univision12may12,1,1082290.story?coll=la-headlines-pe-business
Televisa Teams Up in Bid for Univision Mexico's TV giant joins with four buyout firms to pursue the Spanish-language media firm. By Meg James LA Times Staff Writer May 12, 2006 The sale of the nation's top Spanish-language media company, Los Angeles-based Univision Communications Inc., heated up Thursday when powerful Mexican broadcaster Grupo Televisa joined with four deep-pocketed private equity firms as an expected bidder. Televisa which currently owns more than 11% of Univision teamed with Carlyle Group, Bain Capital, Blackstone Group and Kohlberg Kravis Roberts & Co., according to four sources close to the auction. Televisa's group is one of two major parties jockeying for Univision, two of the sources said, setting the stage for a high-stakes auction. The other consortium includes Goldman, Sachs & Co., Thomas H. Lee Partners and Texas Pacific Group, said those sources, who requested anonymity because of the sensitive nature of the talks. Univision's attractiveness reflects the strong appetite among investors for Spanish-language media. Univision reaches the increasingly lucrative Latino audience through its two television networks, a popular cable channel, a chain of radio stations and a Spanish-language music company. At a time when most traditional English-language networks have struggled to hold on to their audience, Spanish-language media are growing. A sale would result in a huge profit for Los Angeles billionaire A. Jerrold Perenchio, who along with two partners paid $550 million to buy the company 14 years ago from Hallmark Cards Inc. The TV company was bleeding money when Perenchio and his partners, each chipping in $33 million, swooped in to buy it. Analysts now say Univision might fetch as much as $14 billion, or about $40 a share, which would allow Perenchio to cash out with more than $1.4 billion. "The presence of a potential second private equity consortium, and hence a likely second competitive bid, would be the key driver that could drive a Univision sale above $40 a share," broadcasting analyst Anthony J. DiClemente wrote Thursday in a Lehman Bros. report. Univision shares fell 7 cents Thursday to $35.62. News of the Televisa consortium, first reported by cable business news channel CNBC, came at the end of the trading day. Bids are due June 8, according to one source involved in the auction. Univision representatives declined to comment. Representatives of Televisa and the private equity firms also declined to comment. Most analysts have seen Televisa as key to the Univision sale. Under a long-term programming agreement, Televisa produces Univision's most profitable shows, its hugely popular telenovelas, or prime-time soap operas. When that exclusive arrangement expires at the end of 2017, whoever owns Univision would want to have Televisa and its proven hit-making machinery in the fold. Without that ready pipeline of telenovelas, Univision's owners would have to sign up other suppliers or produce its shows from scratch. In addition, Televisa's obligation to supply Univision with Mexican soccer matches expires at the end of next year. Televisa cannot buy Univision outright. Federal rules bar foreign companies from holding more than 25% of a U.S. broadcasting company. Still, according to two sources involved in the auction, Televisa has demanded control of Univision's television networks and the power to veto any exit by its private equity partners. One person familiar with the bidding said any such provision could prompt more regulatory scrutiny on the foreign-control issue. Televisa had considered joining a different investment group that included Providence Equity Partners, Madison Dearborn Partners and billionaire TV entertainment mogul Haim Saban. However, according to one source, Televisa suddenly shifted alliances. The source said the spurned suitors might form a third team or join with Goldman Sachs. Several big U.S. media companies, including Time Warner Inc., Walt Disney Co. and News Corp., also have browsed through Univision's financial records. Those media companies have backed away over price. A successful bid would allow Televisa's 38-year-old chairman, Emilio Azcarraga Jean, to regain control of the company his family started in 1961 but was forced to sell. His father, Emilio Azcarraga Milmo, later joined with Perenchio in 1992 to buy an ownership stake in Univision, along with Venezuelan media titan Gustavo Cisneros. ================================ George Antunes, Political Science Dept University of Houston; Houston, TX 77204 Voice: 713-743-3923 Fax: 713-743-3927 antunes at uh dot edu Reply with a "Thank you" if you liked this post. _____________________________ MEDIANEWS mailing list medianews@twiar.org To unsubscribe send an email to: [EMAIL PROTECTED]
