NEW YORK — Spanish-lingo broadcaster Telemundo Group’s stock jumped $1.93 to $38.81 after investment firm Apollo Group confirmed it had submitted an offer to buy the entire company (Daily Variety, Nov. 19).
Apollo said in a Securities & Exchange Commission filing it was making the offer with Bastion Capital and “unaffiliated persons” it did not identify, but which are believed to be Sony Pictures and Tele-Communications Inc. Sony declined comment and a TCI exec was not available for comment.
Board set to meet on bids
Apollo’s admission comes two days before Telemundo’s board is scheduled to meet to consider bids for the company lodged Monday from several companies, including News Corp. and a partnership of Clear Channel Communications and Mexican broadcaster TV Azteca. Telemundo hired Lazard Freres in July to look for a strategic partner that would help improve the broadcaster’s programming.
Apollo and Bastion are already major shareholders in Telemundo. The two are part of a block of major shareholders that between them own 40% of the stock, although at least one of the members of the block — Telemundo CEO Roland Hernandez — is not linked to the proposal, Apollo said in its SEC filing.
But while Apollo’s position might appear to give its bidding group an edge, Hernandez said Wednesday that Apollo’s offer would be treated just like any of the other offers lodged for Telemundo.
Apollo will be “expressly prohibited from the deliberative process” of the board, Hernandez said. The board is expected to meet Friday to make a decision, although Wall Streeters say it will likely choose the two highest bids and begin final negotiations over the weekend.
Hernandez stressed that the board’s duty “will be to make decisions that benefit all the shareholders.” He said the company was “encouraged by the quality” of the discussions it has had with several entertainment companies interested in making a bid.
Apollo can win either way
Apollo stands to win out whichever bidder triumphs. Wall Streeters say Apollo’s group is unlikely to have overbid for Telemundo, so the group may lose out if the other bidders are extremely aggressive. As an existing shareholder, however, Apollo would make more money if another bidder wins at a higher price.
Some on Wall Street say Clear Channel-TV Azteca will likely be an aggressive bidder. Clear Channel has shown itself to be aggressive in buying up radio properties and Azteca has plenty of programming it could put on the Telemundo stations. Clear Channel execs did not return calls.
Telemundo is believed to be looking for at least $40 a share and people close to the bidding say it could go a little higher.