Goldman gets Clarin stake for $500 mil

Media group valued at $2.8 billion

BUENOS AIRES — After protracted negotiations, U.S. investment bank Goldman Sachs has put up $500 million in fresh capital for Grupo Clarin, Argentina’s principal media company, in exchange for an 18% stake.

Clarin’s estimated revenue for 1999 is $2.2 billion. Around a third of revenue is accounted for by the Clarin newspaper, the world’s largest Spanish-speaking daily, with a print run of around 1 million on Sundays.

Other assets include leading radio stations, cable TV channels and TV broadcaster Artear, which holds the No. 2 spot in the ratings, but is Argentina’s only profitable public TV station due to its higher-class audience.

The Goldman deal is part of a reorganization that began in 1994 and saw the bundling of Clarin’s disparate assets in the holding company Grupo Clarin in early ’99. The price paid by the U.S. bank values Clarin at $2.8 billion.

Management retained

The pact will see no change in controlling shareholders, led by Ernestina Herrera de Noble and Hector Magnetto, group vice president and CEO, respectively.

“Clarin is investing in businesses with high growth potential,” explained Sergio Fornero, head analyst at the local office of Standard & Poor’s. “The group is well-run.”

The move by the U.S. bank is in line with Goldman’s strategy of using its fund vehicles to invest in particular sectors, especially telecoms and media, looking to turn a profit once an investment matures.

As part of the group’s restructuring, Clarin, until now privately held, will be listed on the international market, affording Goldman an exit strategy.

The bank already has assets in the Argentine real estate and dairy sectors, although its investment in Clarin is apparently the largest individual position it has taken in the world.

Clarin first contracted Goldman in 1997 for a U.S. bond placement, although turbulence in international markets made that task impossible. The group’s total debt is around $1.5 billion.

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