Univision stock sale

Televisa selling shares after its stock falls 20%

NEW YORK — Univision Communications has registered for the sale of up to 11.5 million of its common shares that are currently owned by Grupo Televisa, Mexico’s near-monopoly of a media giant.

Televisa, which owns nearly 20% of Los Angeles-based Univision, indicated last May that it was exploring alternatives for up to 15.8 million of its Univision shares.

At the same time, Televisa said it planned to maintain at least 30% of its Univision holdings, thus preserving such negotiated privileges as placing at least one director on the board of the U.S.’ largest Spanish-lingo network, as well as maintaining certain rights for the Mexican broadcast of Univision programming.

Raised eyebrows

Friday’s registration announcement by Univision raised eyebrows in that it followed by days a nearly 20% drop in Televisa’s stock price.

The stock got hammered after the company reported disappointing second-quarter results, including a net loss of 798.5 million pesos (U.S. $92.9 million), compared with a profit in the year-earlier period of 5.6 billion pesos (U.S. $651.1 million).

What investors found so disturbing was that, despite Televisa’s financial slide, its primetime audience share actually rose to 79% in the quarter from 71.4% in the year-earlier quarter.

Poor ad performance

Televisa blamed its disappointing quarter on an inability to translate viewer dominance into ad dollars. It also vowed to replace its advertising system with one that tied ad rates to viewer ratings.

Analysts at Smith Barney and J.P. Morgan voted on the results and not the remedy, however, both downgrading their ratings on Televisa stock.

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