SICC Rejects Latino Group’s Bid for Spanish-Language Stations

A group of prominent Latino investors says its $260-million bid to buy KMEX and four other Spanish-language television stations has been rejected, and the group vows to challenge the stations’ licenses unless the ultimate buyer makes a long-term commitment to Spanish-language broadcasting.

Spanish International Communications Corp., owner of the stations, has rejected at least two bids, and at least one other group has pulled out of the secret bidding process for the television stations. The Federal Communications Commission has given SICC until mid-August to file an application with the commission to transfer the stations’ licenses to a buyer.

It is not known how many bids remain, but sources speculate that there are between four and eight. Century City lawyer Ronald L. Fein, who is representing SICC, did not return a reporter’s telephone calls late last week.

The FCC had recommended that the licenses of 13 television stations be revoked because they are secretly controlled by foreign interests. The FCC then reached a preliminary agreement with the owners to drop its challenge if six of the stations are sold. The five stations owned by SICC are KMEX-TV in Los Angeles, KFTV-TV in Fresno, WLTV-TV in Miami, WXTV-TV in Paterson, N.J., and KWEX-TV in San Antonio. The sixth station, KDTV-TV in San Francisco, is being sold separately by Bahia de San Francisco Television, which has some of the same shareholders as SICC.

Los Angeles surgeon Tirso del Junco said the investor group that he heads was informed by letter that its bid was rejected because SICC was not satisfied with the group’s financing arrangements.

“There was very little explanation,” he said. Del Junco, former chairman of the California Republican Party, said the group was willing to pay $52 million in cash and finance the rest. The financing had already been arranged, he said.

The 29-member group, which also includes Sergio Arrendondo, owner of Los Angeles-based United Steel Fence Co., and Raul Masvidal, who lost Miami’s mayoral race in November, is upset that SICC is requiring bidders to commit to Spanish-language programming for only two years, Del Junco said. The group also thinks Latinos should own the stations, he said.

“These people have made a lot of money from the Hispanic community. I think that two years is nothing,” Del Junco said, adding that the group would like to see a 20-year commitment to Spanish-language broadcasting. “Until these two points are made, we’re going to pursue this before the FCC,” Del Junco said. “I just can’t believe for one minute that the FCC will turn its back on the Hispanic community.”

Another bid by Los Angeles investors Herb Hutner and John Wiegman and an unnamed investment banking firm was rejected, Hutner said.

“We understand that there was a higher bid made and we also understand that the higher bid was rejected,” Hutner said. “What we don’t understand is this whole bidding process.” Hutner, who declined to reveal the size of the bid because he was required to sign a confidentiality agreement, said the bids were accompanied by “onerous” conditions, which he also declined to reveal.

Earlier, a group that includes producer A. Jerrold Perenchio and former U.S. ambassador to Mexico John Gavin said it pulled out of the bidding. Gavin recently said that “the situation was much more complicated” than the group realized and that the potential prices “had gotten out of hand.”

Among those who reportedly have bid are Reno-based Western Communications, which once operated a Spanish-language TV station in San Juan, Puerto Rico, and a group led by Alhambra businessman Enrique (Hank) Hernandez. In addition, Jason W. Smith, a Los Angeles businessman who was accused of fraud last week by the Securities and Exchange Commission in connection with oil-drilling investments he sold, said he and unnamed investors bid more than $400 million for the station. None could not be reached for comment.