$194 mil buyout shuffles b'caster, multi-owners complicate deal
BUENOS AIRES — Top broadcaster Telefe has become the latest pawn in the fast-paced game of mergers and acquisitions that has gripped Argentine media players over the last 12 months.
Through a $194 million majority buyout, Telefe has shifted hands from a diverse collection of shareholders — the largest of them publishers Editorial Atlantida — to Citicorp-backed investor group CEI.
The deal makes CEI the leading Argentine media player. Together with its silent partner TISA (a subsid of Spanish telco Telefonica), it now has holdings that include stakes in three broadcasters, the No. 2 MSO, and various programming, radio and print assets.
Long-time media frontrunner Grupo Clarin, in contrast, owns No. 2 broadcaster Artear, top newspaper Clarin and top MSO Multicanal.
“We recognize that the world is changing, and that single companies don’t have any future. The future is in media conglomerates,” a Telefe exec told Daily Variety.
But the new deal raises questions about media cross-ownership and the relationship between CEI and the government of President Carlos Menem.
Even should Menem retire next year, media influence could be crucial to another victory for his Peronist Party and the continuation of his free-market policies, the source added.
The deal is complicated by the multiple ownership of Telefe. Essentially, it sees financially challenged publishers Atlantida (which held 42%) and several other investors surrendering a combined 70% of Telefe to the control of CEI-TISA.
CEI-TISA are in talks with an association of provincial broadcasters to buy the remaining 30%, and insiders say a letter of intent has been signed.
CEI-TISA also assume control of Atlantida’s dozen magazine titles, plus radio and cable programming assets formerly held along with Telefe in holding company Grupo Federal de Comunicaciones (GFC).
Last year GFC saw revenues grow about 25% to at least $250 million, but its debt is said to be high.
Under the terms of the deal, Atlantida, Telefe and the other assets will all be held by a new holding company, AtCo . Atlantida founders the Vigil family own 40%, while CEI and TISA each have 30%.
(Andrew Paxman in Miami contriubuted to this story.)