Univision deal must close by August 26, 2007.

According to Radio Business Reports, that’s the furthest extension provided for in the sale documents now filed with the SEC for Haim Saban’s Umbrella Acquisition to close its purchase of Univision Communications. Among other details, Saban’s group has to pay Univision a half billion if it can’t get the regulatory approvals necessary to close the deal. Meanwhile, the filing confirms that Univision will have to pay Saban’s group a 300 million break-up fee should Televisa or anyone else come up with a new offer to beat the 13.7 billion bid that was accepted. By the way, shareholders will begin receiving interest on the 36.25 per share payment if the deal isn’t closed by April 26, 2007. Some interesting details of the negotiations were revealed in the massive proxy filing at the SEC. For instance, two of the equity players in the winning consortium, Thomas H. Lee Partners and Texas Pacific Group, initially had talks about bidding with Televisa, but those talks quickly broke off and they became members of the consortium working with Saban. During the bidding process, Univision brought in former FCC Chairman Michael Powell as a consultant on the regulatory issues facing each bidding group. The blow-by-blow recitation of the final bidding said Televisa had its lawyers object to the board of directors meeting that was called to accept the bid from the Saban group, but didn’t indicate that it was prepared to raise its own bid. Televisa has already stated that it won’t submit its stock for conversion to cash under the buyout deal, so look for yet another court battle if it can’t come to terms with the Saban group.

RBR observation: What about the rumors that Saban will try to sell off the Univision Radio division – the former Hispanic Broadcasting Corporation that was acquired in a 2002 deal (closed in 2003) for 3.5 billion? The people circulating those rumors are, predictably, the people who want to buy the radio division. The Miami Herald reports that two former Hispanic radio executives are putting together bidding groups to go after Univision Radio. We have no doubt that TV is Haim Saban’s prime focus, so he might well be amenable to selling the radio group – but only if he can get a premium price. Univision Radio accounts for approximately 24% of the company’s operating income, so we see 3.3 billion as the starting bid just to have Saban break even – and he would surely set his sights higher than that. More likely he would be most interested in divesting the music business, although it may be hard to find many would-be buyers who are able to raise something approaching a half billion bucks to acquire the record labels.

How will Saban pay for Univision?

To finance the closing, the members of Umbrella Acquisition will put up 3.9 billion in cash, with the equity firms, Thomas H. Lee Partners, Texas Pacific Group, Madison Dearborn Capital and Providence Equity Partners each putting in 914 million and Saban’s personal investment company kicking in 250 million. The partners have arranged 10.25 billion in debt financing. The buyers have agreed to make divestitures if the FCC doesn’t give approval by December 26th of requested waivers, which are related to the stakes that Providence Equity holds in Freedom Communications and Madison Dearborn holds in Council Tree Hispanic Broadcasters. Four of Univision’s top executives will receive sizeable payoffs if Saban decides they are not needed on his payroll. President Ray Rodriguez is in line for cash and stock totaling about 17 million bucks, CFO Andrew Hobson nearly 15 million General Counsel Douglas Kranwinkle over nine million and Vice Chairman Robert Cahill 10 million.