Investment Group Buys Univision for $13.7 Billion

Mexico's Grupo Televisa Fails to Acquire U.S. Spanish-language Network

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NEW YORK ( -- Univision Communications has been sold for approximately $13.7 billion to a group of five private equity investment firms. The biggest U.S. Spanish-language media group has been on the block since February and attracted bids from both the winning group and another consortium led by Mexican media giant Grupo Televisa, already a Univision shareholder and its biggest program supplier.
Univision had been seeking a share price of $40 per share, but the bid accepted today is for $36.25 per share in cash.
Univision had been seeking a share price of $40 per share, but the bid accepted today is for $36.25 per share in cash.

Winning bid
Univision had been seeking a share price of $40 per share and reportedly rejected an earlier, lower bid from the investment group. The bid that was accepted today is for $36.25 per share in cash. The five buyers include Saban Capital Group, a private investment firm specializing in media and entertainment whose investments include German TV network Pro Sieben and an Israeli broadcasting network. Saban was formed five years ago by Haim Saban, the billionaire founder of Saban Entertainment, now owned by Walt Disney Co. The other members of the group buying Univision are Chicago-based Madison Dearborn Partners, Providence Equity Partners; Texas Pacific Group; and Thomas H. Lee Partners.

"I knew Univision could not -- or should not -- be able to negotiate a price close to $40 a share," said Philip Remek, an analyst at Guzman & Co. in Miami. "I thought the fair value was about $33."

The announcement came after a week when the sale seemed to stumble. Bids were due June 20, but deadlines were missed by both sides and one of the partners in the Televisa Group, Venezuelan TV group Venevision, pulled out just a few hours before the Televisa bid was submitted. Besides Televisa and Venevision, like Televisa a shareholder and program supplier to Univision, that group included Bill Gates' Cascade Investment and Bain Capital Partners.

Grupo Televisa had hoped to gain control of Univision. "Grupo Televisa is disappointed about the outcome of the Univision auction," the company said in a statement on Tuesday morning. "Notwithstanding our repeated offers to discuss all aspects of our proposal including price, Univision and its advisers refused to enter into any discussions with us after we submitted our initial bid. Given this action by Univision's board, Televisa has a number of alternatives it is considering."

Televisa has made it clear that the U.S. market is regarded as the Mexican media giant's main opportunity for growth and there has been speculation about a "Plan B" in which Televisa could seek to assemble its own Spanish-language network to compete with Univision, NBC Universal-owned Telemundo and Azteca America, the U.S. Hispanic network of Mexico's other TV network TV Azteca. "Televisa will vigorously pursue its options to build its potential in the growing U.S. Hispanic marketplace," the company said.

Televisa's next move
It's not clear yet what will happen to Televisa and Venevision's stakes of 11% and 14%, respectively, in Univision. The acquisition announced today is for the public shares in Univision but Televisa and Venevision hold different share classes. There has been speculation that if unsuccessful in its bid for Univision, Televisa could try to enter the U.S. market on its own.

"That may be determined in future negotiations with those companies given their strategic relationship with Univision," Mr. Guzman said.

Televisa could not immediately be reached for comment.

Acrimonious relationship
Televisa's bid is believed to have been similar to that of the winning group. Analysts speculated that if the two bidding groups were not far apart in price, Univision's chairman and president-CEO, A. Jerrold Perenchio, might have preferred the non-Televisa bid, given Univision's sometimes acrimonious relationship with Televisa. The two companies are involved in litigation over their programming deal, which runs until 2017, and other issues.
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