Hicks sets $500 mil Latin fund

MEXICO CITY — The U.S. leveraged buyout firm of Hicks, Muse, Tate & Furst has formed a $500 million investment fund with Venezuelan conglomerate Cisneros Group to invest in Latin American, Portuguese and Spanish media.

Dallas-based Hicks, Muse and Cisneros of Caracas will each put $250 million into Ibero-American Media Partners over the next three years, and will commit or raise additional capital for the fund if other opportunities arise.

The fund will be located in Miami and will focus on acquiring, investing in and developing alliances with TV and radio broadcasters throughout Latin America, the Caribbean, Spain and Portugal. It also will pursue opportunities in Spanish- and Portuguese-language production and programming firms, which may include U.S. outfits.

The ultimate goal is to create a pan-Ibero-American media network.

“Any investment we make — for example, a television station in Peru — has to stand on its own,” Hicks, Muse managing director and principal Alan Menkes told Daily Variety. At the same time, “we do think opportunities exist to share programming, develop branding and sell advertising on a more regional basis.”

Menkes sees particular potential for consolidation in Latin America’s radio market. “Radio is still highly fragmented,” he said.

Hicks, Muse has been spending aggressively to acquire media properties, having presided over more than $7 billion in media acquisitions over the past four years. In August, it became the largest radio operator in the U.S., and more recently entered theater exhibition when it agreed to buy United Artists Theater Circuit for $850 million. It was rumored to have participated in the bidding for No. 2 U.S. Spanish net Telemundo.

In addition to the investment capital, the partners are planning to contribute existing holdings to the new joint venture. “Those plans are in the process of being completed. We will probably be able to make an announcement next month,” Cisneros senior veep of corporate strategy Beatrice Rangel told Daily Variety.

The multibillion-dollar conglomerate has interests in various fields, including such media holdings as Venevision, the largest producer of Spanish-language programming in South America, a 25% holding in U.S. Spanish net Univision, and a major stake in Galaxy Latin America and its satcaster subsid, DirecTV.

None of Hicks, Muse’s U.S. properties will be merged into the joint venture. The firm formed a Latin American investment fund earlier this year, and has invested or committed to invest more than $400 million in the region.

Hicks, Muse brings financial acumen and an excellent track record in U.S. radio networks to the partnership, Rangel said. “We know the Latin American market, we have the contacts and we are experienced in producing content for TV,” she said. “It’s a perfect marriage of two media.” Cisneros has no radio holdings.

Day-to-day operations of the joint-venture fund will be handled by Cisneros execs, but Hicks, Muse and Cisneros aim to have its management in place by the end of January.

Both sides have already drawn up a list of potential acquisition candidates, “so we should be able to hit the ground running,” Menkes said.

Most are in South America and the Caribbean, Rangel said.

Any deal must be approved by both parties. If the two don’t agree, a partner is then free to invest for its own account, Menkes said.

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