Co. said cost of taking the offer too high
MEXICO CITY — Broadcaster TV Azteca on Monday rejected local businessman Isaac Saba’s offer to buy its disputed option on Mexico City station Canal 40 for $40 million plus the assumption of debt.
TV Azteca said the cost of taking the offer was too high, as it would have meant abandoning the future possibility of operating a channel aimed at high-income earners in the capital.
More than 20% of Mexico’s roughly 100 million inhabitants live in the area.
TV Azteca signed a 10-year contract with Canal 40 prexy Javier Moreno Valle in 1998, which included an option to acquire 51% of Televisora del Valle de Mexico, which holds the license for Canal 40.
TV Azteca provided programming and advertising sales, with the two sharing operating profits equally. TV Azteca also loaned the financially strapped channel $10 million and advanced an extra $15 million against future earnings.
Canal 40 terminated the deal the following year, claiming Azteca was not holding up its end of the contract.
Matters worsened last December, when Azteca forcibly seized control of Canal 40’s transmission tower after the Paris-based Intl. Court of Arbitration ruled that its contract was valid. It fed Azteca programming over normal programming, renaming the station Azteca 40.
The Mexican government shut down the channel for a month, before reinstating Canal 40 at the close of January. Since then, the net has returned to regular programming and has even begun producing telenovelas that compete with Azteca fare.