Univision Deal Wins Approval Narrowly

Univision Communications Inc. shareholders Wednesday approved Chairman A. Jerrold Perenchio’s hard-fought deal to sell the Los Angeles-based company for $12.3 billion to a group of private investors.

Univision received the support of 63% of shareholders -- just clearing the 60% needed to win approval of the deal.

“Jerry Perenchio might have been sweating a little bit at the last minute there,” said David Joyce, media analyst with Miller Tabak & Co.

The next hurdle will be for the consortium, which includes Los Angeles billionaire Haim Saban, to win regulatory approval. That is expected early next year.

Approval by shareholders was not a slum-dunk. The Spanish-language media company was required to have “yes” ballots from at least 60% of shareholders because Perenchio’s original business partners -- Mexico City-based Grupo Televisa and Caracas, Venezuela-based Venevision -- voted against the transaction in June. Their vetoes triggered a provision in the partners’ agreement that diluted the potency of Perenchio’s super-voting shares, which typically give him more than 55% control.

Complicating matters, if shareholders neglected to return their ballots, that would have registered as a “no” vote. On Wednesday, Televisa, Venevision and Mexican telecommunications mogul Carlos Slim Domit voted their shares against the deal, according to a source close to the Latin American companies. Univision declined to provide a breakdown of the vote. Together, the three shareholders hold nearly 30% of the shares in Univision, with Televisa owning about 11%, Venevision about 13% and Slim Domit about 4%.

But enough shareholders agreed to sell their shares for $36.25 to give a victory to the consortium, which consists of Saban as well as Madison Dearborn Partners, Providence Equity Partners, Texas Pacific Group and Thomas H. Lee Partners. The group also agreed to assume Univision’s $1.4 billion in debt, increasing the total value of the deal to $13.7 billion.

Univision shares fell 4 cents Wednesday to $34.40.

Another pressing issue for the prospective owners is how best to mend fences with Televisa, which failed in its bid to buy Univision. Televisa provides the prime-time telenovelas that have fueled Univision’s ratings.

“There is a little bit of ironing out that still needs to be done,” Joyce said. “The new owners will want to protect their investment by keeping intact the Televisa programming relationship.”

In June, the investors offered Televisa the option of rolling over its Univision shares to become a partner with a 19% stake in the firm. Televisa said no. It has said it plans to use its $1-billion-plus proceeds from the Univision sale to “pursue other opportunities.”

Televisa has also pressed ahead with lawsuits against Univision, including one that seeks to terminate the long-term programming deal that gives Univision the exclusive use of Televisa’s Spanish-language shows in the U.S. through 2017. Televisa also wants a court order to prevent Univision from distributing Televisa shows on the Internet.

Televisa appears to be most interested in renegotiating the royalty payments from Univision, giving the Mexican production powerhouse a bigger slice of Univision’s profit from its shows, said Philip Remek, media analyst with Miami-based investment bank Guzman & Co. He said legal fees for protracted court battles could cost much more than agreeing to a new schedule of royalties.

Perenchio’s top lieutenants are poised to receive handsome payouts, according to a recent regulatory filing. If terminated immediately after the new group takes over, Univision President Ray Rodriguez would receive a $9.5-million severance and bonus payment; Chief Financial Officer Andrew W. Hobson would receive $8.1 million; Vice Chairman Robert V. Cahill would receive $7.1 million; and General Counsel C. Douglas Kranwinkle would receive $6.8 million.

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meg.james@latimes.com