Megacable rejects Televisa offer

Mexican service provider Megacable has rejected the offer from Televisa to combine the pair’s cable operations.

“Megacable has fully analysed the offer of December 8, and has unanimously resolved to reject it, given that the current business plan approved by the Megacable board offers better prospects over the long term for Megacable and its investors, taking into consideration that Megacable is not for sale. On December 12, the said resolution was communicated to Televisa,” said Megacable.

Media giant Televisa was earlier reported to have made an offer to combine its cable and broadband subsidiary Izzi with rival pay TV service provider Megacable by Reuters, citing an offer document it had seen.

The all-stock proposal would have seen Megacable’s shareholders own about 45% of the merged company, with Televisa holding the remaining majority stake.

According to Reuters, the offer placed a 19% premium on Izzi. Televisa had also proposed to offer a special dividend to Megacable shareholders on the deal closing.

The new Megacable would have remained publicly listed.

According to the document seen by Reuters, Televisa contends that the combined entity would create one of the country’s leading cable operators that would be better placed to compete than the individual companies.

Televisa’s cable unit passes about 18.7 million homes in Mexico, with 15.6 million revenue-generating units.

The company also owns satellite pay TV operator Sky, with about 7.3 million RGUs.

Megacable has 4.3 million subscribers and 10.9 million RGUs.