Televisa Explores U.S. Hispanic Options

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After a Televisa-led investor group failed in its bid to acquire Univision Communications, the Mexican broadcast giant says it will "vigorously pursue" other options in the burgeoning U.S. Hispanic market. 

Univision on Tuesday accepted a $12.3 billion bid from a rival consortium that includes Madison Dearborn Partners, Providence Equity Partners, Texas Pacific Group, Thomas H. Lee Partners and media mogul Haim Saban's Saban Capital Group. The group put up a bid of $36.25 per share for the Spanish-language media giant and will assume $1.4 billion in debt.

The winning bid came after Univision rejected the group's first offer of $35.50 per share. Univision also turned down the Televisa-led group's $35.75 a share offer. The Televisa effort, once considered the front-runner, was hampered by several investors backing out late in the process.

Televisa says it tried repeatedly to discuss its proposal with Univision, but the company "refused to enter into any discussions with us after we submitted our initial bid."

The loss is particularly stinging for Televisa as the company looks to increase its presence in the fast-growing U.S. Hispanic market.  Televisa already owns a minority stake in Univision and supplies the bulk of its primetime programming through 2017. Now Televisa says it is considering options to expand its U.S. presence, but it would not elaborate. One possibility is the company would try to distribute its shows online.

But Televisa says it will not team up with the winning group. "We think it would be suicidal for any group to proceed without Televisa, but we are not going to bail out this consortium," says spokesman Robert Siegfried.

Few have watched the sale more closely that Univision's main U.S. rival, NBC Universal-owned Telemundo. Univision's $12.3 billion sale price is a "real validation of the space that we're in," NBC U Chairman Bob Wright said Wednesday on CNBC. 

NBC acquired Telemundo in 2001 for $2 billion, an amount that seemed steep at the time for the No. 2 Spanish-language network. Under NBC, Telemundo has improved ratings but still lags behind Univision and must also contend with its sister network, Telefutura.

"We have about half the audience that Univision has. They have been around longer; they're bigger - we already knew that," Wright said. "But we have a $2 billion equity investment in there and here's a private equity group coming along, and these are careful buyers - I mean they analysed this thing for six months - and they're making what will turn out to be a $12 billion equity investment, plus maybe a billion and a half of debt."

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