 |
||||||||
 |
||||||||
|
||||||||
|
Univision is buying Hispanic radio group
©Associated Press DALLAS -- Univision Communications is buying Hispanic Broadcasting Corp. in a $3-billion deal that would create the largest U.S. television, radio and music company for the fast-expanding Spanish language population. The new Univision would own 50 television stations, two TV networks and 55 radio stations with the ability to reach into the homes of most of the 35-million U.S. Hispanics. When the companies announced the all-stock deal Wednesday morning, it was worth $3.5-billion. But the value fell to $2.97-billion by the end of regular trading, as Univision shares tumbled $5.84, or 15.5 percent, to $31.86. Shares of Hispanic Broadcasting rose $1.55, or 6.3 percent, to $26. Univision apparently trumped rival Telemundo in reaching a deal, and would gain an advantage over its biggest competitor in the U.S. Hispanic market by its ability to offer a combination of TV, cable and radio spots. Telemundo and NBC, which are owned by General Electric, also were interested in buying the radio chain, analysts said. One competitor reacted quickly to the deal: Radio-station owner Spanish Broadcasting System Inc. sued Hispanic Broadcasting and San Antonio, Texas-based Clear Channel Communications Inc., the largest U.S. radio company and a 26 percent owner of Hispanic Broadcasting. Spanish Broadcasting accused the rival broadcasters of undermining its value so they could buy the company cheaply. The lawsuit was filed by David Boies, who led the U.S. government's antitrust case against Microsoft Corp. Clear Channel chairman Lowry Mays called the lawsuit's allegations "absurd and unfounded." Hispanic Broadcasting declined to comment. The appeal of combining Univision and Hispanic Broadcasting can be seen in the 2000 Census: Now 12.5 percent of the U.S. population, Hispanics are expected to make up one-fourth of the population by 2050 and become a consumer powerhouse. Los Angeles-based Univision, the nation's largest Spanish-language TV company, owns the Univision and TeleFutura TV networks and the Galavision cable network. It earned $52-million on sales of $888-million last year. Univision's broadcast lineup includes Sabado Gigante, which began broadcasting in 1962 and is the longest-running Spanish-language show without a rerun. Other viewer favorites include a talk show hosted by Cristina Saralegui and soccer games. Hispanic Broadcasting's stations are concentrated in California, Texas and Florida, with others in Arizona, Nevada, Illinois and New York. They offer programming that includes international top 40, Latino mix, Tejano and sports talk. It is among the nation's largest Hispanic radio companies and owns stations in 13 of the 15 largest U.S. Hispanic markets. The company claims that its stations reach 60 percent of all U.S. Hispanic homes, and it owns a network of bilingual Web sites for Hispanic communities. It earned $31-million on $241-million revenue last year. David Joyce, an analyst with Guzman & Co. in Miami, said Univision's move blocked Telemundo from getting the most desirable Spanish-language radio broadcaster, and it made it harder for mainstream media companies such as Viacom Inc. to break into the Hispanic market. Hispanic Broadcasting would become a wholly owned Univision subsidiary and remain based in Dallas, officials said. Analysts said regulators probably would force Univision to sell or trade some stations as a condition for approving the purchase of Hispanic Broadcasting. Company officials said they might have to shed radio stations in a few markets, including Dallas and Houston, but that any divestitures would be financially insignificant. Earlier this year, Univision bought a music label, Fonovisa Records, that is trying to develop Latin recording stars. Asked by an analyst, Univision executive vice president Andrew W. Hobson said there wouldn't be "a big forcing" of Fonovisa's artists on Hispanic Broadcasting's radio stations. Under the agreement, each share of Hispanic Broadcasting common stock will be exchanged for 0.85 shares of Univision Class A common stock. Shareholders of Hispanic Broadcasting would own 26.5 percent of the combined company. The deal includes a $100-million fee to Univision if Hispanic Broadcasting pulls out of the deal, officials said. The two largest shareholders of Hispanic Broadcasting, the family of chairman and chief executive McHenry Tichenor Jr. and Clear Channel, have agreed to vote in favor of the transaction, as has Univision's controlling shareholder, chairman, president and chief executive A. Jerrold Perenchio. The acquisition, which has been approved by boards of both companies, is subject to approval by the shareholders of both companies and regulators. The companies expect the deal to close by year-end. Company officials said they had held conversations about a deal since 1994. Last year, Hispanic Broadcasting officials said they were interested in buying the Telemundo network, which is second to Univision in the Hispanic TV-viewing market. James B. Boyle, an analyst for Wachovia Securities, said Telemundo officials can take a mixed message from the Univision purchase of Hispanic Broadcasting. "They like the fact that Spanish-language broadcasting just got a higher profile," Boyle said, "but they probably don't like the fact that the competition just got tougher."
 © 2006 • All Rights Reserved • Tampa Bay Times
490 First Avenue South • St. Petersburg, FL 33701 • 727-893-8111 
|
From the Times Business report
From the AP
|
