Group to pay $15 mil total for net, will also assume debt
BUENOS AIRES — U.S. investment bank J.P. Morgan Chase and Telefonica’s Admira have finally found a buyer for Azul Television, Argentina’s fourth-ranked web, after more than a year of hunting.
A group of local investors, led by journalist, lawyer and media investor Daniel Hadad, beat four rivals to pick up the Buenos Aires broadcaster and three affils in other parts of the country.
They will pay $3 million in cash, another $12 million over four years, and assume Azul’s estimated $36 million debt. The deal is expected to close this week.
Telefonica had been seeking to sell its 49% in Azul since 2001 to reduce debt. It also faced pressure from Argentina’s broadcasting regulator, Comfer, to comply with a regulation that limits the number of stations an investor can own in one area. Telefonica owns market leader Telefe, also based in Buenos Aires.
Australia’s Prime Television bought Azul and the three affiliated broadcasters for $140 million in 1997. But faced with diminishing ad sales in light of the country’s deepening recession, it sold 49% to Admira in 1999 and hired J.P Morgan to sell the rest.
Unsuccessful, J.P. Morgan was obligated by contract to buy the shares from Prime for $67.5 million in August 2001.
Over the years, many companies have expressed interest in Azul including U.S. firms Hicks, Muse, Tate & Furst, Liberty Media and Walt Disney Co., all of which have interests in Argentina, Brazil’s Organizacoes Globo, Germany’s Kirch, Spain’s El Correo and Venezuela’s Cisneros Group.
In the end, the contenders were Argentine businessman Francisco de Narvaez, Argentine publisher Editorial Atlantida, Mexico’s TV Azteca, and Jose Hawilla who founded Brazilian sports rights company Traffic.
Hadad and his partners, Benjamin Vijnovsky and Fernando Sokolowicz, face a tough market.
Over the past two years, Azul has slipped into fourth position in share of advertising revenue and audience, overtaken by America TV, owned by Paraguayan sports tycoon Carlos Avila. Both lag Telefe and No. 2 Artear-Canal 13, a unit of local media conglomerate Grupo Clarin.
In an effort to revive ratings, youth-skewed Azul bet heavily on reality shows last year, achieving the most success with a local version of “Popstars,” about the hunt for members of girl band.
The country is also weathering the worst economic slump in history. Ad spending has fallen as much as 70% this year on broadcast TV.
Despite this, Hadad has been investing in media in recent years, buying stakes in a financial daily newspaper, two radio stations and a TV production company.
He has for several years hosted a newsmagazine show, the politically right-leaning “Despues de Hora” (After Hours).
Fernando Sokolowicz, a former director of daily Pagina/12, has co-produced several films, including Gerardo Herrero’s “Frontera Sur” (Southern Border) in 1998 and Jorge Polaco’s “La Dama Regresa” (The Lady is Back) in 1997. Benjamin Vijnovsky is a real estate and textile businessman.