Univision has filed the necessary paperwork to begin an initial public offering (IPO) on its Class A
The number of shares to be offered and the price range for the proposal have not yet been determined, the company said on Thursday.
Morgan Stanley, Goldman, Sachs & Co. and Deutsche Bank Securities Inc. are acting as lead book-running managers for the proposed offering. A prospectus is to come.
Also on Thursday, Univision said that it extended its deal with Televisa, revising its royalty rates in the process, among other financial details of the partnership. The two corporate maneuvers are not unrelated, as the Program Licensing Agreement (PLA) — extended through at least 2030 — is subject to Univision completing its IPO.
Here are the royalty details, mostly in Univision’s own jargon:
Effective Jan. 1, 2015 and through Dec. 2017, the royalty rate on substantially all of Univision’s Spanish-language media networks revenue is 11.84 percent, compared to 11.91 percent under the prior terms. On Jan. 1, 2018, the royalty rate will increase to 16.13 percent, compared to 16.22 percent under the prior terms.
Additionally, Televisa will continue to receive an incremental two percent in royalty payments on such media networks’ revenues above an increased revenue base of $1.66 billion, compared to the prior revenue base of $1.65 billion. The royalty rate will again increase to 16.45 percent starting on June 1, 2018 and for the remainder of the term, compared to the prior rate of 16.54 percent. With this second rate increase, Televisa will receive an incremental two percent in royalty payments above a reduced revenue base of $1.63 billion.
Other changes include an equity capitalization amendment, which basically increases Televisa’s voting rights to 22 percent on Univision
Finally, Televisa will convert $1.125 billion of Univision debentures into warrants that are exercisable for new classes of Univision’s
“These amendments to the PLA and the terms of our MOU underscore the strength of Univision’s relationship with Televisa and the significant and unique benefits of our mutually beneficial partnership,” said Randy Falco, president and chief executive officer of Univision. “By taking these steps and our pursuit of other related initiatives, Univision is in a stronger competitive position going forward.”
“Univision today is one of the most successful and diversified media organizations globally thanks to the hard work and dedication of Randy Falco and his team,” added Alfonso de Angoitia, executive vice president of Grupo Televisa. “With these transactions we strengthen our relationship further and reiterate our full commitment to Univision and its future. On a personal note I want to thank Haim Saban for his leadership of the Company and personal dedication in bringing these transactions to fruition.”
Univision recently made headlines for leading the way in dumping Donald Trump over his offensive remarks about Mexican immigrants.