One Bid For Univision Expires, Another Comes In Late

Jun 26, 2006  •  Post A Comment

Events probably didn’t go quite the way Univision Communications Chairman and CEO A. Jerrold Perenchio had been expecting last week.

Mr. Perenchio had set a June 20 deadline for bidders interested in buying the Spanish-language media conglomerate. Two rival groups-one led by Los Angeles-based media mogul Haim Saban, the other clustered around Mexican media company and Univision part owner Grupo Televisa-were expected to make competing multibillion-dollar bids.

But Tuesday came and went without a bid from Televisa-led investors, while Mr. Saban’s group offered a bid of about $35 per share, or just under $11 billion, that expired Friday.

However, just as Mr. Saban’s offer expired Friday, Televisa submitted its bid. Details of the Televisa offer, which came three days after the deadline, were not made public.

Mr. Saban’s bid was lower than predictions made last month by some analysts, who suggested that Univision could go for as much as $12 billion. Mr. Saban’s investment partners include the equity firms Texas Pacific Group, Madison Dearborn Partners, Providence Equity Partners and Thomas L. Lee Partners.

Televisa’s consortium of investors in Univision initially included fellow Univision investor and Venezuelan media owner Gustavo Cisneros and Microsoft founder Bill Gates’ Cascade Investments, plus the private equity firms Bain Capital Partners, Blackstone Group, Carlyle Group and Kohlberg Kravis Roberts & Co., but last week Blackstone, Carlyle and KKR pulled out of the group. That complicated any plans Televisa and Mr. Cisneros have for Univision, since U.S. law limits foreign ownership of a broadcaster to 25 percent.

While there had been speculation that Univision was looking for about $40 a share, Philip Remek, a media analyst with Guzman & Co. in Coral Gables, Fla. said the number offered by Mr. Saban’s group was more in line with the value of Univision.

“I’ve kept to my fair value target of 33 dollars [per share] through all of this,” Mr. Remek said, noting that he thought recent pricing was overvalued.

Private-equity firms that were once bullish on Univision may be less interested in a purchase due to a drop in prices for high-yield debt, Mr. Remek said.

Even with the expiration of Mr. Saban’s offer, exactly what Mr. Perenchio is willing to accept is also open to debate, Mr. Remek said.

“One of the questions now is whether Mr. Perenchio has any flexibility on price on the $40 [per share] level,” he said. “If he can get 35, 35 and a half, he should take it.”