Hicks goes Argentine

Takes $700 mil stake in Wall St.-bound CEI

MIAMI — There’s no doubt about it, Hicks, Muse, Tate & Furst hablan español.

The Dallas-based firm has made its biggest Latin American media commitment to date, announcing Wednesday a $700 million investment in fast-growing Argentine conglom CEI.

That will give Hicks, Muse a 30%-33% stake in a group that has shares in three Buenos Aires broadcasters: Argentina’s No. 2 MSO (co-owned with TCI Intl.), a top cable programmer and a leading magazine publisher.

CEI also has a significant stake in Telefonica de Argentina — one-half of the country’s telco duopoly, which is operated by Spain’s Telefonica.

Hicks, Muse will acquire about one-third of the 40% stake currently held by Citibank, all of the 19% held by Argentina’s Werthein family, and four of the 11 seats on the CEI board, Hicks, Muse managing director Alan Menkes told Daily Variety.

Menkes said Hicks, Muse’s first priority will be to help rationalize CEI’s diverse cable assets. Via MSO CableVision, the company has acquired stakes in three other MSOs in the last two years.

“Argentina is at the beginning of the cross-selling advantages that you have when you own TV, radio, telephony and cable,” said Menkes, adding that his company would explore ways of growing pan-media advertising.

“Our plan going forward is to see if CEI wants to participate with Hicks, Muse in investments outside Argentina,” Menkes said.

Hicks, Muse will explore participation in the new round of cable licensing taking place in Brazil this year, likely in association with CableVision, Menkes added.

The deal comes less than a week after Hicks, Muse — together with Venezuela’s Cisneros Group — unveiled a $40 million acquisition of Chilean broadcaster Rock & Pop and related radio assets (Daily Variety, May 22).

Cisneros is not involved in the CEI deal, but may later come in for a piece, sources said. Cisneros faces a conflict of allegiance, in that it is backing satcaster Galaxy Latin America (GLA), whose local distribution partner, media conglom Grupo Clarin, is CEI’s chief rival.

CEI is listed on the B.A. stock exchange, having a market cap of around $2 billion, and is prepping to list on Wall Street. Menkes said the purchase may be completed after the New York IPO.

CEI’s rise as a media conglom has been precipitous, and is commonly believed to have been facilitated by the friendship between the group’s top money man, banker Raul Moneta, and President Carlos Menem.

Local sources say CEI might reciprocate by acting as a propaganda machine for Menem, who is trying to have the Argentine constitution changed to allow him to run for a third term in 1999.

Should Menem’s party lose that election, sources speculate, CEI might be pressured to divest some of its broadcast assets.

“We don’t see that pressure emerging,” Menkes commented, though he added, “TV assets are important to CEI, but as components of its overall value, they’re small compared to telephony and cable.”

As well as its Chilean assets, Hicks, Muse has 20% of Mexican pay service and GLA partner Multivision and controls Venezuela’s Intercable, one of that country’s three chief MSOs.