Sunday, February 12, 2006

Para la venta

Univision has put itself up for sale, hopefully leading to a bidding war among the majors. The shares are now going for around $35/share. Buying now is risky, but I expect the eventual takeout price to be around $42-$45. As the largest independent Spanish media outlet in the US, Univision is coveted by every network.

I had made a post on television channel owners when Crown Media, which owns the Hallmark Channel, announced that it was looking for a buyer. Crown's attempt to sell itself has apparently not been much of a success.

I have been buying Univision shares regularly, with the average cost now being around $27/share. I will not be buying more at current prices, but will be holding on to my shares till the buyout.

Other targets I mentioned in the earlier post were ValueVision (VVTV), Crown Media (CRWN), Discovery Channel (DISC), Outdoor Channel (OUTD). I own shares of ValueVision, Crown and Discovery, the last being the result of a spinoff from Liberty stock I own. Valuevision remains a buy as a takeover target. The rest still look like value buys, but with no major catalysts to move the prices in the near term.

More generally, the entire TV broadcasting sector looks cheap relative to the overall market. Companies like Hearst-Argyle Television, Nextstar and Sinclair, will also likely be looking to go private or sell themselves.

Another speculative bet here would be National Lampoon (NLN) with its attractive content library. I have not opened a position yet, but will be considering doing so.


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