For tax purposes, the partners will form a joint venture that will merge with Telemundo, with Telemundo the surviving entity. Apollo and Bastion will own 50.1% of Telemundo. Sony will just under 25%, per foreign ownership restrictions; and Liberty will own just under 5% of the voting equity and 20% of the non-voting equity, per cable/broadcast cross-ownership rules.
After the merger, Telemundo will sell the assets of the Telemundo network to a 50/50 joint venture between Sony and Liberty. Sony will be the managing partner of the network, overseeing programming and marketing.
Telemundo, second in the marketplace to Univision, has been struggling of late, and recently said it was looking for a strategic partner.
Insiders said Rupert Murdoch's News Corp. had also bid, along with station owners Hicks/Muse in a bid with General Electric/NBC.
A major problem with Telemundo has been with programming and distribution, areas that Sony and Liberty have strengths.
Bastion Capital is the nation's largest Hispanic-owned private equity fund.
Copyright November 1997, Crain Communications Inc.