Telefonica & Hicks, Muse agree on asset split

MIAMI — After months of wrangling and rumors, U.S. investment company Hicks, Muse, Tate & Furst and Spanish telco Telefonica have reached a preliminary agreement to split most of their jointly held Argentinean media assets.

Telefonica will take control of leading broadcaster Telefe, which will be used as the launching pad for an aggressive expansion into the Americas by subsid Telefonica Media.

After deducting outstanding debt, Hicks, Muse’s Argentinean investment arm CEI Citicorp Holdings will net $240 million from the sale of its stakes in TV broadcasters Telefe and Azul plus several radio stations and regional TV broadcasters. Agreement values the package as a whole at $1.15 billion.

“This is an extremely good deal for the shareholders of CEI,” a source close to the company said. “The price is around double the book value for the assets.”

Describing the deal as “a very detailed preliminary agreement,” the source said a final agreement is expected by year’s end, by which time the warring partners will have reached a decision on publishing company Editorial Atlantida.

Vigils want publisher

The third partner in the Atlantida conglom, the local Vigil family, which will reportedly net $268 million for its 40% share in the other media assets, is apparently keen to retake control of the publishing company, once its flagship operation. Hicks, Muse may retain a stake in order to develop its strong magazine brands and maintain an alliance with the family.

Hicks, Muse and Telefonica have been fighting over control of their shared assets since the beginning of the year. In addition to the media package, their joint investments include leading MSO Cablevision and Cointel, the holding company that controls the dominant local telco, Telefonica de Argentina.

With Telefonica finally having offered a price acceptable to Hicks, Muse for the media portion of their shared assets, sources close to the U.S. fund are now more optimistic that a preliminary agreement can soon be reached on Cablevision and Cointel. Hicks, Muse will likely take over the cable system, Telefonica the telco interests.

Gearing up for major push

Already moving aggressively in the Latin American telecom and Internet sectors, Telefonica formally launched Telefonica Media this year to produce and distribute Spanish-lingo TV content, and the subsid is gearing up for a major push in the region.

“In the next few months, we will announce other acquisitions in Argentina, Latin America, and very probably, in the United States,” said prexy Jose Antonio Rios, who had ankled satcaster Galaxy Latin America for Telefonica. Rios’ goal is to acquire broadcasters in 10 countries over the next three years, the Spanish newspaper El Pais reported.

Telefonica Media already has a controlling interest in Antena 3, Spain’s biggest private broadcaster. Antena 3 execs are expected to take on a larger management role at Telefe and Azul.

(John Hopewell in Madrid contributed to this report.)

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