Through The FLY's Eyes: Univision
The Univision Network's Allure
Spanish-language broadcasting giant Univision (UVN) created a mild “chat” on Wall Street Tuesday with word that the company may soon receive buy offers.
Media companies Grupo Televisa SA of Mexico and Venevision of Venezuela are expected to submit initial bids.
The allure of Univision is obvious enough: about 98% of U.S. Hispanic households are viewers of the Univision Network - a remarkable market share statistic. Analysts surveyed in the Reuters estimate expect Univision to earn $1.08 per share in 2006 on revenue of $2.2B.
However, hurdles exist to potential deals, including possible bidder conflicts of interest, ownership concentration of media properties, and foreign ownership restrictions. Also, Univision’s CEO Jerrold Perenchio owns a class of supervoting shares that could thwart a shareholder vote to approve a buy-out.
Currently, Venevision holds a 14% stake in Univision and Televisa holds an 11% stake. Each equity stake could serve as a down-payment/equity chip for a potential buy-out offer.
The market was neutral Tuesday on word of possible offers for Univision, as the company's share traded virtually unchanged at mid-day, down just 5c to $35.65.