The sale process around Univision Communications is set to accelerate as final bids for the Spanish-language broadcaster are believed to be due by the end of next week.
Univision hung out the “for sale” sign last July, when the company hired Morgan Stanley, Moelis & Co. and LionTree to advise on a sale process that had long been expected. A representative for Univision declined to comment.
The three primary contenders for the company, according to sources close to the situation, are Hemisphere Media Group with backing from Liberty Global, an investor group headed by former Viacom chief financial officer Wade Davis and Platinum Capital. Representatives for Hemisphere and Davis declined to comment. A rep for Platinum did not immediately respond to a request for comment. Bloomberg News previously reported Liberty Global’s move to partner with Hemisphere.
Saban Capital and a clutch of private equity firms including Madison Dearborn Partners, Providence Equity Partners, TPG Capital and Thomas H. Lee Partners acquired a majority interest in Univision in 2007. Mexican media giant Televisa also owns a sizable stake. Rumored suitors for Univision over the years have included CBS Corp., Discovery Inc. and John Malone’s Liberty Media.
But that was a few years ago. The shifting sands in media and entertainment have made this a tricky time for Univision to be on the block. None of the industry’s major media players are in the mix for Univision this time around, in part because the logical bidders are already preoccupied with M&A integrations on a much larger scale, in the case of Disney, AT&T and ViacomCBS.
Univision enjoys strong market share in the U.S. But its lack of a significant digital presence and limited library product available for exploitation make it less attractive at a time when the major networks and studios are hunting for content first and foremost. Univision has more than 62 O&O TV stations and 58 radio stations. It also operates the UniMas broadcast network, cabler Galavision and sports network TUDN.
Observers are forecasting a final sale price in the neighborhood of $9 billion-$11 billion. A few years ago, Univision investors floated the company for an asking price of about $19 billion. Under previous president-CEO Randy Falco, Univision tried to mount an IPO, but the company’s financial disclosures raised red flags about its growth prospects and the lack of a strong digital strategy led to lukewarm-at-best interest. The IPO plan was tabled in March 2018. Three months later, broadcast TV veteran Vincent Sadusky was brought in as CEO.
Univision has shouldered a heavy debt burden since the Saban-led takeover — leverage that is a turn off for some prospective suitors. As of Sept. 30, the company had $7.3 billion in debt on its books. Revenue for the first nine months of 2019 came in at $2 billion while net income improved from last year’s losses to $192.4 million.
Of the known bidders, Davis’ group comes with a ready-made CEO. Davis left Viacom late last year after 14 years, seven of which were as CFO.
Liberty Global’s entry into the process was viewed as a sign that Malone, the renowned media investor who is chairman of the international cable group, sees a chance to scoop up Univision at a bargain price. Miami-based Hemisphere Media owns existing niche Spanish-language channels that serve the U.S. and other markets, as well as Puerto Rico’s dominant broadcast stations, WAPA-TV. But Hemisphere, headed by former Telemundo executive Alan Sokol, is a much smaller entity, which likely opened the door to the partnership with Liberty Global.