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Entravision Communications Corporation Message Board

  • boogaloozzz boogaloozzz Apr 10, 2013 1:58 PM Flag



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    • Of course Univision could buy EVC. Its been discussed openly before. Univision already owns 10% of EVC but I don't see a Univision buyout as a most likely play. Instead, there are a large number of financially well positioned English players in the US that are facing prospects of slow growth in their traditional markets. For any one of them a buyout of EVC at this ridiculously low valuation would be a home run. With reasonable buyer financing the EVC business becomes a cash cow on day one with more than excellent growth prospects for the future.

      Even if there are no acceptable offers on the table, EVC will refinance its bonds within a couple months and become a cash cow all on its own.

      There is an interesting thought about this current period of a few months -- if a takeover were contemplated, such a buyout could eliminate the early redemption payments to the current bondholders. The acquirer and current shareholders would be the beneficiaries at the expense of current bondholders. Just an interesting incentive there -- to refinance via a buyout could be very cost efficient and smart for all equity parties.

      • 2 Replies to outpissed
      • I like the post Outpissed. I have a question. Like you were pointing out if a buyer did decide to acquire EVC," Why would the the buyer be exempt from redemptions to the bondholders? I don't understand that part of the investment equation. I bought some shares recently and the stock looks to be heading up for potential earnings as well as being a takeover candidate. I live in So Cal so as your were pointing out dempgraphics favor this company.

      • You are spot on. Activity is starting to heat up in the media space. Today we woke to find that Sinclair is acquiring Fisher Group for $41/share. Fisher has far less appeal than EVC, no growth demographic, only 20 TV stations and a couple radio stations. It is great to see acquisition activity heating up in this space. Industry financing HAS thawed. Univision itself is levered about twice as much as EVC relative to EBITDA, but Univision has easily refinanced at favorable rates and the rating agencies are talking about a potential upgrade of Univision debt. Very very good sign of things to come for EVC.

        EVC has so many wins checked off it is becoming overwhelming can't lose scenario:
        1) Huge growth demo - growing in both population numbers and buying power
        2) Debt refi - Bonds callable in August (or even now at a price) financing cost should fall in half or more.
        3) Massive Healthcare act info dissemination efforts by the fed & states (like the census spending windfall but bigger)
        4) Increased healthcare advertising by the entire industry
        5) Growth and integration of the former LER representation group, now Entravision reps
        6) Marketing boarder advertising to Mexico based product advertisers - very smart
        7) Fast growing political importance of Entravision (2014 election)
        8) Overall outsized growth of core advertising Vs. English comp sets
        9) World Cup in 2014
        10) NOL's mean almost zero income taxes forever. Huge post re-finance cash flows are protected.
        11) History of shareholder friendly actions like large dividends in 2011 & 2012.
        12) Exceedingly competent management & executive staff, best in the business
        13) No insider selling. Its going a lot higher
        14) Huge insider ownership

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