FCC concerns delay sale of Hispanic chain to Univision TV

No. 1 Spanish radio chain was going for $2 billion

March 15, 2003|By BLOOMBERG NEWS

WASHINGTON - Univision Communications Inc., the biggest U.S. Spanish-language television network, told Standard & Poor's that it wouldn't close a proposed $2 billion purchase of Hispanic Broadcasting Corp. yesterday as the companies had planned.

On March 10, federal regulators sent the companies a letter saying they were concerned that the network would have too much influence over business decisions at radio operator Entravision Communications Corp. Univision earlier had agreed to cut its 27 percent stake in Entravision to allay antitrust concerns.

Univision had proposed keeping the right to approve the sale of Entravision TV stations affiliated with Univision.

The Federal Communications Commission said that may give Univision too much control over Entravision.

An analyst said the FCC's concerns wouldn't block the transaction. "We do not regard the Entravision matter as a deal breaker," Merrill Lynch analyst Jessica Reif Cohen wrote in a report. "However, it may delay the closing."

Hispanic Broadcasting, the No. 1 Spanish-language radio broadcasting company in the United States, didn't immediately return a call seeking comment.

Standard & Poor's said yesterday in an e-mailed statement that Univision had given it notice that the transaction wouldn't close on time.

The FCC asked the companies to provide it more information on Univision's control over Entravision within five days of receiving the letter.

"We are concerned ... that a right to approve the sale of any station affiliated with a Univision-owned network would give Univision excess influence over decisions taken in the ordinary course of Entravision's business," Barbara Kreisman, chief of the FCC's media bureau, wrote in the March 10 letter.

Univision's shares rose 46 cents to close at $24.37 yesterday on the New York Stock Exchange. Hispanic Broadcasting's shares added 40 cents to $20.55.

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