Says its adjustment to media law is completeWednesday, August 20, 2014
Clarín backtracks, moves on with sale of Unit 4
After a series of back and forths, the Clarín Group confirmed it will sell its cable channels to US investment firm 34 South Media.
The media conglomerate led by CEO Héctor Magnetto confirmed it will accept the original proposal made by New York business leader Alexander Silverman over the so-called “Unit 4” in order to comply with the anti-trust regulations set by the Media Law following threats of mandatory divestment by the AFSCA media watchdog.
AFSCA made public details of the operation yesterday, insisting that Clarín was, in fact, backtracking from an earlier attempt to keep control of its cable channels by approving an “alternative offer” that included transferring the assets to an independent trust composed by both 34 South Media and the Clarín Group. The government and media experts agreed that the move was an effort to buy some time until a major change in the political landscape — that is, the end of President Cristina Fernández de Kirchner’s term.
In presentation 3002/2013 that was released yesterday, Clarín Group legal trustee María de los Milagros Páez complainted about the “threats” made by AFSCA, led by Martín Sabbatella, but confirmed the divestment commitment made by Clarín in the original adjustment plan.
This includes selling cable channels TyC Sports, TyC Max, Volver, Magazine, Quiero Música and Canal Rural to Silverman’s investment fund for US$31.5 million — the same amount as the offer made on June 26.
Clarín said AFSCA must take note that the conglomerate “is fully complying with the divestment plan that was agreed to” and requested the department “adopt the necessary administrative procedures” in order to make the sale effective.
In its presentation, the conglomerate included the minutes of the Board of Directors’ meeting of August 15, where company representatives discussed AFSCA’s resolution ordering Clarín to stick to the original divestment plan.
“The threat... of mandatory divestment... will produce further economic damages to this company and its shareholders,” Group President Jorge Rendo said during the meeting.
Páez, in turn, said that AFSCA’s claim that Clarín’s alternative proposal to transfer the assets of Unit 4 to an independent trust meant a modification of the adjustment plan was “a substantial mistake.”
Nevertheless, and given that AFSCA ”seems to be looking for any excuse to bring down (our) plan in order to take over the group,” Rendo called other directors to insist on the original proposal by 34 South Media — a motion that was unanimously approved.
In order to confirm this decision, a new, extraordinary shareholders meeting was called for September 22.