Oct. 5 (Bloomberg) -- Grupo Clarin SA, Argentina’s biggest media company, may soar as much as 50 percent as President Cristina Fernandez de Kirchner’s bid to tighten control over local broadcasters meets congressional opposition, according to Raymond James analyst Alexandre Garcia.

Fernandez’s proposal would require Clarin, owner of the nation’s biggest newspaper and most-watched television channel during prime time, to sell some stations. The stock, which fell 22 percent in the week after Fernandez unveiled the bill Aug. 27, has recovered after opposition senators such as Luis Petcoff Naidenoff of the Radical Civic Union said they will seek changes during debate that begins Oct. 9 to protect press freedom.

“If the law is rejected or significantly modified, shares could skyrocket 50 percent,” Garcia said from Sao Paulo.

Fernandez, 56, has said the media bill would democratize the airwaves by breaking a monopoly and opening the broadcast spectrum to non-profit groups, universities and the government. She and her husband, former President Nestor Kirchner, have publicly battled with Clarin over what they say has been biased coverage of their policies.

Opposition leaders say the bill gives the government too much sway over the press, and some lawmakers have said debate should be delayed until a new Congress takes office in December.

‘Stigmatized’

“Clarin is being stigmatized for political purposes,” the company’s flagship newspaper said in an editorial yesterday. “In none of its business is Clarin a monopoly. In any other country, a company like Clarin would be an example of private enterprise, a source of national pride.”

Officials at Clarin didn’t return phone and e-mail messages left at the company’s press office in Buenos Aires. A message left with President Fernandez’s press office wasn’t returned.

Clarin rose 0.4 percent to 7.28 pesos today. The shares have climbed 24 percent this year, lagging behind the 90 percent increase in the country’s benchmark Merval index. The shares trade at 4.32 times estimated earnings, less than half the 9.74 ratio for the Merval, according to data compiled by Bloomberg.

The current media bill would forbid one company from holding licenses for both broadcast television and cable networks in the same metropolitan area, and mandates that broadcasters renew their licenses every two years.

Changes to the bill may include lengthening the time companies have to sell assets under the new rules or eliminating the license renewal requirement, Garcia said.

Senate Vote

Ruling party Senator Guillermo Jenefes, who oversaw hearings on the measure in the Committee on Media and Freedom of Expression last week, said it’s “very probable” that the bill will be changed, forcing it back to the lower house.

The Victory Front ruling coalition and its allies have enough votes in the 72-member Senate to pass Fernandez’s media proposal, Miguel Pichetto, head of the coalition, told reporters Oct. 2.

“This bill will strengthen the government,” said political analyst Ricardo Rouvier, 67, who runs polling company Ricardo Rouvier & Asociados in Buenos Aires. “It was sent to congress with a request for quick approval and it seems like it will happen. So with changes or without changes, this bill means a victory for the government.”

Clarin’s Canal 13 television station accounts for a market- leading 44 percent share of TV advertising, according to the company’s Web site. It also owns radio stations, 13 cable and broadcast TV networks, and Internet companies.

‘Uncertainty’

Argentina’s lower house passed the government-backed initiative on Sept. 17 by a 146-3 vote, after opposition lawmakers walked out of the chamber in protest. To gain support for the measure, Fernandez eliminated a clause that would have allowed telephone companies to offer television service.

“We’re expecting changes in the bill, and with all the uncertainty in the congressional debate, it’s hard to know how the law will affect Clarin,” said Guido Bizzozero, 33, an analyst at Allaria Ledesma y Cia Sociedad in Buenos Aires. He rates Clarin a “buy” with a target price of 11.4 pesos. “At this point we don’t know if they would have to sell any assets.”

Daniel Vila, president of closely held Uno Medios, a media company based in the western province of Mendoza, said Sept. 24 that the bill amounted to “indirect expropriation” and would lead to lawsuits if companies are forced to sell licenses.

Reviewing the Proposal

“It’s not such a perfect bill that we shouldn’t change even a comma in it,” Jenefes, 59, said in a Sept. 27 interview on Radio 10. “As senators we have the constitutional right and obligation to review laws and make changes to them if we think that is necessary.”

Jenefes’s press office declined to say which articles he wants to see changed when contacted by Bloomberg News. Any change by the Senate would send the bill back to the lower house, where the ruling party would need to muster support of a majority of the 257 members to reject the changes, further delaying passage.

The Argentine Association of Journalists said in a Sept. 17 statement that the bill would “gravely” affect the freedom of speech and that the legislation would give the executive branch majority control of the body charged with issuing licenses.

“The only radio stations that will be heard across the entire country will be government-run stations,” Carlos Molina, the head of the Radio Broadcasters Association of Argentina, told reporters Sept. 30 after testifying before the Senate.

Markets Last Week

Last week, the yield on Argentina’s benchmark 8.28 percent dollar bonds due in 2033 fell 17 basis points, or 0.17 percentage point, to 12.51 percent, according to JPMorgan. The price rose 1 cent to 67 cents on the dollar.

Argentina’s currency was little changed against the U.S. dollar last week. The peso has declined 10 percent this year.

The Merval stock index advanced 0.4 percent to 2,024.80. Banco Hipotecario SA, a Buenos Aires-based mortgage lender, rose 13 percent while Petrobras Energia SA, the Argentine unit of Brazil’s state-run oil producer, declined 6.2 percent.

Event                                   Date
Vehicle Sales, Output                   Oct. 5
World Gas Conference                    Oct. 5-9

To contact the reporters on this story: Bill Faries in Buenos Aires at wfaries@bloomberg.net; Eliana Raszewski in Buenos Aires at eraszewski@bloomberg.net

Last Updated: October 5, 2009 16:55 EDT