Univision buying Hispanic Broadcasting

Wednesday, June 12, 2002 | 11:08 a.m.

SUN STAFF AND WIRE REPORTS

DALLAS -- Univision Communications, the nation's leader in Spanish-language television, is buying the country's largest Spanish-language radio broadcaster, Hispanic Broadcasting Corp., for $3.5 billion in stock.

The deal announced today will greatly expand Univision's arsenal of media properties that advertisers can use to reach the fast-growing U.S. Hispanic population of about 35 million.

Under terms of the agreement, Hispanic Broadcasting becomes a wholly owned subsidiary of Los Angeles-based Univision Communications. The subsidiary will continue to be based in Dallas.

In Southern Nevada, the company has two stations, KISF 103.5-FM and KLSQ 870-AM. Overall, Hispanic Broadcasting owns and operates 55 radio stations in 13 of the top 15 Hispanic markets and reaches 60 percent of all U.S. Hispanic homes.

The company also owns and operates a network of Hispanic community-focused bilingual websites.

Los Angeles-based Univision already owns two U.S. Spanish-language broadcast television networks, Univision and TeleFutura; 50 television stations; the Galavision Spanish-language cable network; an online service; and a music business.

In Nevada, Univision owns a 31 percent stake in three television stations operated by Entravision Communications Corp., a Santa Monica, Calif.-based company that is the largest broadcast affiliate of Univision. Those stations are KINC Channel 15 and KELV Channel 27, both based in Las Vegas, as well as Reno-based KNRV Channel 41.

Univision and its rival, the Telemundo network, have long dominated the U.S. market for Spanish-speaking viewers. Telemundo owns KBLR channel 39 in Las Vegas. Hispanics make up 12.5 percent of the U.S. population and are expected to grow to 25 percent by 2050.

"This transaction, which further expands Univision as the pre-eminent U.S. Hispanic media company, represents a tremendous opportunity for shareholders, advertisers and the many talented employees of both companies," A. Jerrold Perenchio, Univision chairman, president and chief executive officer, said in a statement.

Under the agreement, each share of Hispanic Broadcasting common stock will be exchanged for 0.85 shares of Univision Class A common stock. At Univision's closing share price Tuesday of $37.70, that represents a 31 percent premium compared with Hispanic Broadcasting's Tuesday closing stock price of $24.45.

The deal would give Hispanic Broadcasting shareholders about 26.5 percent of the combined company.

The two largest shareholders of Hispanic Broadcasting, the Tichenor family and San Antonio-based Clear Channel Communications Inc., have agreed to vote in favor of the transaction, as has Univision's controlling shareholder, Perenchio.

The acquisition, which has been approved by boards of both companies, is subject to approval by the shareholders of both companies as well as regulatory approvals. The deal was expected to close by year's end.

"Univision has a tremendous track record of success, and we believe that its powerful platform will create new opportunities for our employees and advertisers," said McHenry T. Tichenor Jr., the Hispanic Broadcasting chairman, president and chief executive.

Last year, Hispanic Broadcasting officials said they were interested in buying the Telemundo network. Telemundo has since been bought by General Electric Co., which operates the NBC television unit.