April 30, 2006

"We're in the Money!" No Matter Who or When…

To sell or not to sell, that is the question. Or maybe it isn't, especially when not being in a hurry could mean more money. The ongoing negotiations for the sale of Univision may be seeing a temporary stop, something that may end up apparently postponing the bidding yet and unexpectedly increasing the value of the network which went on the block at an estimated worth of $12 billion to $13 billion.

"Jerry (referring to Jerrold Perenchio) is firm on the price," said one source, "and he's not contemplating any discounts even if he's got to wait a couple of months."

While Les Moonves, chief executive of CBS Corp., reiterated the media group was not planning to make a bid for the largest U.S. Spanish-language media, there are persistent rumors that CBS -which was split from Viacom in January -might be seriously considering a bid for the Univision giant.

CBS has been after smaller internet purchases while shying away from larger acquisitions following Viacom's media mogul Sumner Redstone's directions. They are also planning to sell radio stations in New York, Buffalo, and Texas. However, industry sources say, CBS is ready to shell out the cash and walk away with the trophy. Others insist Televisa has it in the bag.

Observers continued to follow the negotiations between Univision and the Televisa-led consortium of five partners (including Bill Gates' Cascade investment), and the multi-lateral approach from two private groups, Texas Pacific and Tom H. Lee Partners, alongside Madison Dearborn and Providence Equity Partners.

"If they don't realize $13 billion is a bargain, they'd better hurry up because Univision's price may go up in a matter of weeks," a source confided.

Among recent suitors, Disney had shown an interest to acquire at a lower price with the intention of divesting some of Univision assets.

"Jerry wants $13 billion or nothing…unless you mean a 'little' more. He's singing all the way to the bank. Sooner or later, he knows he's in the money. What other property can offer a growing 50 million market that's expected to triple in a few years while the general market population continues shrinking?" concluded the analyst.

In our opinion, the wise Univision mogul has already gotten what he wanted: The unquestioned high valuation of the property. And that's priceless!

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