Univision's Board OKs $12.3 Billion Sale

Univision Communications Inc.'s board agreed to sell the nation's largest Spanish-language broadcaster for $12.3 billion in cash to a consortium of investors, the parties involved in the sale announced Tuesday. The company's shares soared more than 7 percent.

The consortium, led by private equity firms Texas Pacific Group Inc. and Thomas H. Lee Partners, also includes Madison Dearborn Partners LLC, Providence Equity Partners Inc., and media mogul Haim Saban.

Mexican broadcaster Grupo Televisa SA, which led a rival consortium of investors, issued a statement Tuesday saying it was "disappointed" with the outcome of the Univision auction.

"Notwithstanding our repeated offers to discuss all aspects of our proposal, including price, Univision and its advisers refused to enter into any discussions with us after we submitted our initial bid," the company said. "Given this action by Univision's board, Televisa has a number of alternatives it is considering."

Univision's bylaws allow Televisa, which owns an 11 percent stake in Univision and supplies it with much of its programming, to veto a sale of the company, but such a move can be defeated by a 60 percent approval from Univision shareholders.

The Texas Pacific Group-led consortium initially bid $35.50 a share, or just under $11 billion total, last week. But Univision, which had reportedly been seeking an offer of $40 a share, rejected the group's initial bid as too low.

The investor group's offer remained on the table until Friday, when it expired. Both sides talked over the weekend and came to terms, a person familiar with the deal told The Associated Press.

Each of the private equity groups is expected to invest around $1 billion initially and Saban somewhat less, the person said.

The deal, if approved by Univision shareholders and regulators, is expected to close in the fourth quarter of this year or first quarter of 2007, according to the news release.

Univision dominates the U.S. 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.

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

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

Still, Televisa and its remaining partners, private equity firms Bain Capital Partners LLC and Cascade Investment LLC, 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.

Full story: Forbes.com