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By Ronald Grover and Liana B. Baker
June 20Univision Communications has had several
informal sale talks in the past year, but the company's board
could take a year or longer to decide on a potential deal, as
the company seeks to boost profits and pay down debt, people
familiar with the matter said.
Owners of the Spanish-language U.S. media company think it
could fetch more by further improving its earnings ahead of an
initial public offering or sale in 2015, according to three
people familiar with the board's thinking.
Univision's reluctance to commit to a formal sale process at
this stage highlights the challenges that the company's
potential suitors face in winning what is widely considered to
be one of the media industry's most highly coveted businesses.
The company held preliminary talks with CBS Corp and
Time Warner Inc earlier this year, but those talks were
preliminary in nature, the people said.
The board, including members who represent private equity
firms that bought Univision for $12.3 billion in 2007, could
still decide to sell if Univision fetches an offer that is too
good to turn down, said one of the people.
For now Univision is focused on paying down its $9.2 billion
in debt through its rising cash flow, that person added.
New York-based Univision was taken private by a group of
buyout firms including Haim Saban's Saban Capital Group, Madison
Dearborn Partners, Providence Equity Partners, TPG Capital and
Thomas H. Lee Partners.
Mexican media company Televisa owns an 8 percent stake in
Univision and has bought debt that could be converted into a
stake of up to 30 percent. It holds three board seats and also
collects hundreds of millions in licensing revenue and royalties
every year from Univision which airs a large chunk of its
"It is unclear if Televisa would be willing to divest its
stake or even acquire the remainder of the company at this
juncture," Barclays analyst Danish Agboatwala said.
A representative for Televisa declined to comment on its
Univision reduced its debt by nearly $130 million in the
first quarter ended March 31, its most recent quarter, compared
to a year ago, according to a financial statement on its
website. Net cash flow from operations more than tripled, to
$77.8 million in the quarter that ended March 31, as the company
enjoyed higher ratings at its UniMas broadcast network and
Univision Deportes Network cable sports channel.
Representatives for CBS and Time Warner Inc declined to
comment. Univision spokeswoman Monica Talan said the company
does not comment on rumors.
The talks underscore the consolidation sweeping the
telecoms, cable and satellite TV industry, which is being shaken
up by Comcast Corp's proposed $45 billion takeover of
Time Warner Cable Inc and AT&T's agreement to buy
satellite TV provider DirecTV.
Walt Disney Co is another media company that could be
interested in Univision, analysts said. Maxim Group analyst John
Tinker said the fees that Univision collects from pay TV
operators could appeal to Disney, while there could also be
synergies with its theme park business since many park visitors
are Spanish speaking. A Disney representative declined to
Univision, which based in New York, owns two broadcast TV
networks, 62 TV stations and 68 radio stations in major U.S.
Hispanic markets and Puerto Rico. Its cable channels include
entertainment network Galavision and Fusion, a news and
lifestyle channel for English-speaking viewers it launched in
October with Walt Disney Co.
(Additional reporting by Greg Roumeliotis; Editing by David