Univision accepts $13.7bn PE bid

A lengthy bidding war to acquire Univision Communications ended with the Spanish-language media company accepting an offer from a consortium of five private equity firms, in a deal valued at approximately $13.7 billion (€10.9 billion)—one of the largest media deals in recent history.

The deal works out to a cost of $36.25 per share, with the acquiring consortium writing a sizable equity cheque of $3.85 billion. The investor group includes such major players as Madison Dearborn Partners, Providence Equity Partners, Texas Pacific Group, Thomas H. Lee Partners and Saban Capital Group. The latter firm is headed by billionaire Haim Saban, founder of kids’ show production company Saban Entertainment. Each firm is committing $900 million toward the deal, except Saban, which is putting up $250 million.

The deal ends the recent dramatic wrangling over Univision’s fate. Last Tuesday, Univision had turned down a previous offer by the group of $35.50 per share. The next day, private equity firms The Blackstone Group and Kohlberg Kravis Roberts jumped ship from a competing consortium that included Mexican media giant Grupo Televisa, Bill Gates’s private equity firm Cascade Investment, and Bain Capital.

Soldiering on, the hobbled Grupo Televisa-led group then made an offer of $35.75 per share—lower than Univision  and investors had expected, according to the New York Times—and the rival consortium quickly moved in with its successful offer of $36.25 a share. The final deal is valued at $13.7 billion, and includes the assumption of $1.4 billion in debt.

Haim Saban’s undeniable television expertise will likely help guide the fortunes of Univision under private ownership. The company he founded, Saban Entertainment, partnered in 1995 with Rupert Murdoch’s News Corp. to form the Fox Family channel, which was sold to Disney in 2001 for $5.2 billion. Not coincidentally, Saban Capital Group was formed shortly thereafter, and has concentrated on media investment.

Univision Communications’ eponymous flagship television network is the number-one Spanish-language television network in the United States, and the fifth largest in any language. The company also owns the largest Spanish-language cable network, Galavision, and the largest Spanish-language radio group in the United States. “Univision has tremendous long-term growth opportunities in each of its businesses and we look forward to working together to build on its success and enhance its value in the years ahead,” said the acquiring group in a joint statement.