Hicks, Muse and Telefonica settle Argentine asset split

Spanish telco to clear way for subsid IPO

MADRID — U.S. investment company Hicks, Muse, Tate & Furst and Spanish telco Telefonica appear close to deciding on how to split up their Argentine media alliance.

Just when a deal will be announced, however, is a matter of debate.

Telefonica is anxious to clean house in Argentina to clear the way for subsid Telefonica Media’s initial public offering, skedded for early 2000.

Hicks, Muse (via its stake in CEI Citicorp, which has amassed Argentina’s biggest portfolio of media and communications assets) and Telefonica have been fighting over control of leading MSO Cablevision, broadcaster Telefe and telco Telefonica de Argentina, among other holdings. Those jointly owned properties were once viewed as potential building blocks for a pan-Latin media and communications powerhouse.

But each company has been pursuing its own regional strategy while battling it out in Argentina. Long a passive investor in the TV biz, Telefonica became more proactive this year, creating Telefonica Media to produce and distribute Spanish-lingo content.

Hicks, Muse formed a new investment vehicle to create a pan-regional cable company, an effort that hit a bump when its CEO became a fugitive from justice in June. Tom Hicks is now running that venture.

But now, under an initial restructuring estimated at $800 million, Hicks, Muse and Telefonica are readying a plan to divvy up the properties of the Atlantida media conglom and a few other key assets.

Hicks, Muse would get Atlantida’s publishing operations, while Telefonica Media would take over broadcasters Telefe and Azul Television and a radio company. Telefonica would keep its 20% stake in sports programmer Torneos y Competencias (Hicks, Muse and TCI own the remaining shares) and with it the rights to Argentine soccer league games for Spanish TV.

Hicks, Muse would also buy out Telefonica’s 36% interest in Cablevision (in which Liberty Media also owns shares; it runs the MSO under a separate contract).

Some sources claim this is a done deal. But while Cablevision prexy Julio Gutierrez acknowledged that talks are ongoing, he denied an accord was imminent. “They are still in negotiations, but there is still no agreement,” he told Daily Variety.

Telefonica Media execs in Madrid as well as Hicks, Muse reps in Buenos Aires and New York were unavailable for comment.

(Mary Sutter in Miami contributed to this report.)