Largest Spanish broadcaster in US sold for $12.3bn

LOS ANGELES : Univision Communications’s board late Monday agreed to sell the largest Spanish-language broadcaster in the US for $12.3bn in cash to a consortium of investors led by private equity firms Texas Pacific and Thomas H Lee Partners, a person familiar with the deal said.

The $12.3bn figure equals $36.25 a share, not including about $1.4bn in debt, the person said, speaking on condition of anonymity due to the confidential nature of the negotiations.

The consortium, which also includes private equity firms Madison Dearborn Partners, Providence Equity Partners and media mogul Haim Saban, initially bid $35.5 a share or just under $11bn last week. But the Spanish-language broadcaster, which had reportedly been seeking an offer of $40 a share, rejected the group’s initial bid as too low.

Still, the investor group’s offer remained on the table until Friday, when it expired. Both sides then continued talking over the weekend and were able to come to terms, the person said. Each of the private equity groups is expected to invest around $1bn initially and Saban somewhat less, the person said. The deal, if approved by regulators, is expected to close in the fourth quarter of this year or first quarter of ’07, the person added.

Univision dominates the US Hispanic media market through its three television networks — Univision, TeleFutura and Galavision — more than two dozen television stations, a recorded music division, Internet portal and Spanish-language radio stations. The company says it reaches 98% of Hispanic households in the US.

Monday’s agreement marked the end of a rocky auction for the broadcaster, which decided in February to explore selling the company.

A rival investor group led by Mexican broadcaster Group Televisa SA — which owns an 11% stake in Univision and is a key supplier of Univision’s programming — struggled to put together a bid early last week amid defections by several of its investor partners.

First, private equity firm Carlyle Investment Management dropped out, followed by Blackstone Management Associates V, and Kohlberg Kravis Roberts, LP.

On Friday, Televisa lost the investment arm of Venezuelan broadcaster Venevision, a unit of The Cisneros Group of Companies. Venevision owns a 14% stake in Univision and also supplies the US network with programming.

Still, Televisa and its remaining partners, private equity firms Bain Capital Partners and Cascade Investment, which invests for billionaire Bill Gates, managed to submit an offer Friday that they claimed at the time exceeded the Texas Pacific Group’s initial offer.