NEW YORK - Univision Communications Inc. said on Tuesday it accepted a $12.3 billion cash buyout offer by an investor group including media mogul Haim Saban, edging out favored suitor Televisa in a tense cross-border auction for the No. 1 U.S. Hispanic broadcaster.
Shares in Univision rose more than 7 percent with news an agreement had been signed. Some investors had feared no deal would materialize as both bidding groups submitted a first round of offers last week well below the $40 per share sought by Univision.
But the Saban investor group, which includes Madison Dearborn Partners, Providence Equity Partners, Texas Pacific Group and Thomas H. Lee Partners, prevailed with an offer of $36.25 in cash per Univision share and the assumption of $1.4 billion in debt.
"This is why we play out the whole ballgame," said BMO Capital Markets analyst Lee Westerfield. "The accepted offer ... is priced at a slight premium to the reported Televisa bid and carries no FCC encumbrance."
Univision's chairman and controlling shareholder, Jerrold Perenchio, defended the deal as still delivering "substantial current value to our shareholders."
Mexico's Televisa is the world's largest Spanish-language programmer and supplies most of Univision's top-rated television shows, but had scrambled to assemble an offer after four of its investment partners dropped out.
The group bid $35.75 per share for Univision compared with a prior offer by the Saban consortium at $35.50 per share, according to sources familiar with the talks.
Televisa Considers Alternatives
Televisa said on Tuesday that Univision's board had refused to negotiate over its initial offer, and that it would consider "a number of alternatives" in the U.S. Hispanic market.
Televisa is a major shareholder in Univision with about 11.4 percent. It had long eyed increasing its stake, but faced a limit on foreign ownership of U.S. broadcasters set by the Federal Communications Commission that could have complicated its bid.
Televisa's failure to clinch a deal raises questions over future ties with Univision under a long-term programming agreement between the two, already soured by disputes over royalties and rights to air Televisa shows on the Internet.
The company has in the past suggested it would consider other options if a Univision bid failed, including a possible partnership with another U.S. broadcaster.
Univision is home to a television network of the same name that has risen to rank among the largest U.S. broadcasters by catering to a Spanish-speaking audience with popular novelas and broadcasts like the current World Cup soccer tournament.
The company also owns the Galavision cable network as well as the largest U.S. radio station group in Spanish. Hispanic media is one of the fastest-growing sectors of the U.S. media industry, drawing double-digit growth in advertising dollars.
Univision's board approved the Saban group offer, which is not contingent on financing. Within the group, the four private equity firms provided $900 million in cash each while Saban Capital is contributing $250 million, according to a source familiar with the transaction.
Saban, whose personal wealth is estimated at more than $3 billion, was a television producer who built his fortune by bringing the "Power Rangers" cartoon series to the United States. In 2003, Saban and a group of private equity firms bought German broadcaster ProSiebenSat.1.
The deal awaits shareholder and regulatory approval and is expected to close during the spring of 2007.
Shares in Univision had lost nearly 10 percent of their value since the company's deadline for bids on June 20 as investors expressed doubts a deal might be concluded at all.
On Tuesday, Univision shares regained much of those losses, jumping $2.27 to $34.29 on the New York Stock Exchange.