After fielding offers that fell short of its expectations, Univision Communications early Tuesday agreed to a $12.3 billion buyout proposal from a group of private-equity companies that includes media mogul Haim Saban. Univision turned down a rival offer from another consortium that includes Mexican broadcaster Televisa, once considered the front-runner.
The prevailing group, which includes Madison Dearborn Partners, Providence Equity Partners, Texas Pacific Group, Thomas H. Lee Partners and Saban Capital Group, put up a bid of $36.25 per share for the Spanish-language media giant. Univision’s holdings include the top-rated Univision network, a second broadcast network Telefutura, radio stations and TV stations. The offer includes the assumption of $1.4 billion in debt.
“This blue-chip group brings to Univision in-depth knowledge of the rapidly changing media landscape and an exceptional track record of supporting growth and enhancing value,” Univision Chairman A. Jerrold Perenchio said in a statement.“The outstanding cash flow multiple our shareholders will receive reflects the extraordinary growth of the Hispanic population, Univision’s unique bond with its community and our ability
to deliver tremendous audiences to our mainstream advertising partners.”
The deal, subject to shareholder and regulatory approval, is expected to close in spring 2007.
The deal comes after Univision initially rejected an offer from the same group for $35.50 a share. The company had hoped to receive as much as $40 per share. The Televisa-led group offered $35.75 per share, which was also quickly rejected.
Since Univision unveiled plans to put up an auction earlier this year, Televisa had been considered a frontrunner to lead a buyout effort. The company already holds a minority stake in Univision and supplies most of its programming, including its wildly popular prime time novelas. Under media-ownership rules, however, Televisa cannot own more than 25% of an American broadcast company and needed partners to mount its bid for Univision. But its consortium stumbled after some of the investors, including the Blackstone Group, dropped out.
Televisa will still be actively involved in Univision’s business: The Mexican broadcaster has deal to provide Univision programming through 2017.