Equity Investor Likeliest Univision Buyer.
January 14, 2006
According to Radio & records magazine, given the media-ownership restrictions facing potential suitors like CBS and News Corp., philosophical conflicts with Comcast and potential shareholder resistance at Time Warner, Merrill Lynch analyst Jessica Reif Cohen says a private equity bidder could emerge as the new owner of Univision, should the company ultimately be sold.
“In particular, we note that Univision’s free cash flow generation could be attractive to a financial sponsor,” she says in a report today. Cohen also notes that while the rumored $40 per share asking price for the company may scare off some buyers — News Corp. CEO Rupert Murdoch has already balked at the number — an equity investor could make a case for buying at that level.
“The high valuation requires somewhat more aggressive assumptions than normal to obtain an attractive return, but our models suggest that a leveraged buyout could obtain a high teens return at prices between $40-$45 [per share[,” she says. “Even higher multiples are possible,” adds Cohen, “but a bit of a stretch.”
By Joe Howard, R&R Washington Bureau Chief
Courtesy of http://www.radioandrecords.com
