Univision agrees to sell itself at $ 12.3 Billion

New York -- After a long struggle and often stormy courtship, Spanish-language media giant Univision has chosen its buyer.

The winners had earlier put forward an offer of $ 35.50 to beat its rivals including Grupo Televisa SA. They get two TV networks, Univision and TeleFutura, with about an 80 % share of the fastest-growing US television market, beating rivals such as NBC Universal’s Telemundo and TV Azteca SA’s Azteca America.

"They are the dominant programming force in that marketplace," Paul Kagan, who heads research firm PK Worldmedia Inc. in Carmel, California, said before the sale. "You pay a certain amount for the brand alone."

But Univision's deal which includes four private-equity partners and media mogul Haim Saban will acquire Jerry Perenchio's broadcasting company for $ 12.3 billion might not be the last word in the controversy.

The problem here is the long-simmering lawsuit between Univision and shunned bidder Televisa, the Mexican programmer. Univision and Televisa have a programming output deal that extends through 2017. According to Televisa, it has not been compensated properly by Univision for some programming and this dispute has been on for some time.

According to a statement issued by Televisa, "Notwithstanding our repeated offers to discuss all aspects of our proposal including price, Univision and its advisers refused to enter into any discussions with us after we submitted our initial bid," Televisa said. "Given this action by Univision's board, Televisa has a number of alternatives it is considering." Televisa said also that it will "vigorously pursue its options to build its potential in the growing U.S. Hispanic marketplace."

Another problem that is arising is that there is a link between a member of the investment group and Nielsen Media Research. Thomas H. Lee, one of the buyout firms allied with Saban, is a partner in Valcon, a consortium of equity interests that recently bought VNU, Nielsen's parent company. Nielsen determines TV ratings.

Along with Thomas H. Lee, the buyout group includes private equity firms Madison Dearborn, Providence Equity and Texas Pacific. They are expected to pay $ 36.25 a share for Univision. The price represents decent upside in shares that fell from above $ 36 at the start of June to $ 32.03 on Monday.

However, the takeover will occur at a price that is significantly below what Univision had hoped to attract when it had put itself up for sale in February.

At that time, Univision had hoped to collect as much as $ 40 a share given its position as one of the only operators serving the booming Hispanic demographic in the U.S.

A separate investor group including Univision minority stake-holder Televisa offered $ 35.75 for Univision last week. However, the Televisa bid suffered several defections and reportedly was unable to get a higher bid off the ground in subsequent days.

Univision shares rose by $ 2.27 that is to $ 34.30 on Tuesday.