The Blackstone Group and Kohlberg Kravis Roberts have dropped out of a consortium of investors led by Mexican television giant Grupo Televisa planning to bid in the auction for Spanish-language broadcaster Univision, according to the New York Times.
Univision had already turned down an offer by a consortium composed of Haim Saban, Madison Dearborn, Providence Equity Partners, TPG and Thomas H. Lee Partners.
The Carlyle Group, which had also been part of the Televisa consortium, left the group last week also citing a dispute over how much to bid. The Televisa-led group missed the deadline to submit its offer to Univision Tuesday night. The group now only includes Venezuelan media investor Gustavos Cisneros, Bill Gates’ private equity venture Cascade Investment and Bain Capital. It is unknown whether this group can afford to make the $36 a share offer that Univision was expecting.
Univision’s shares declined as much as 4.2 percent today after the news broke, suggesting that the market believes the deal will happen at a lower price than the $13 billion some analysts had originally estimated the company would fetch.
Televisa and Cisneros cannot own more than 25 percent of Univision because federal regulations prevent foreign entities from owning any larger portion of an American broadcaster. This means that Cascade and Bain would have to take on 75 percent of the investment.
Earlier this week US television networks had voiced concern over a potential conflict of interest that could develop if Blackstone, KKR and Carlyle won the bid. The three firms are also part of a consortium that recently purchased control of market research company VNU, owner of the Nielsen TV ratings business, in a $9.6 billion buyout. Nielsen is the dominant audience measurement company in the US and its ratings determine advertising rates for the networks. It is not known if this concern played any role in the firms’ decisions to drop out of the group.