Through The FLY's Eyes: Univision
from Theflyonthewall.com
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.
posted by Eric at
2:06 PM
2 Comments:
What is everyone's view of the UVN bid process?
By
digdoug, at 2:43 PM
Given UVN's existing relationship with Grupo Televisa and Venevision - Venevision owns a 14% stake in UVN, and Televisa an 11% stake - it's prudent that UVN evaluate offers from one or both, first, as UVN has ample research on each organization's finances, and the potential for a deal to be finalized. Since deals frequently fail because the acquirer's resources are inadequate, and because deal evaluation, itself, entails expenses, its advantageous to evaluate known parties first. If UVN cannot reach an agreement with either, Univision may then court other potential suitors. Keep in mind that any bid must clear regulatory and ownership concentration requirements.
By
Theflyonthewall.com, at 3:29 PM
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