Grupo Hevi Chief Executive Officer Hector Vielma is shrugging off acquisition interest from bigger carriers like Megacable Holdings SAB, saying his Mexican cable operator isn’t for sale at any price.
The closely held company, with 340,000 video subscribers and 100,000 Internet customers, is a family business and can keep growing on its own, Vielma said yesterday in an interview in Monterrey, Mexico. Vielma founded the company in 1974 and has sons who work for the business.
“We like to work. We have 40 years’ experience in the industry,” said Vielma, 64. “Why would we want to sell?”
Vielma’s resistance presents an obstacle for Megacable CEO Enrique Yamuni, who said this week that his company remains interested in buying Hevi. Megacable, the country’s biggest cable operator, has 1.6 million TV customers and 532,000 Web subscribers. Andres Coello, an analyst at BBVA Bancomer SA in Mexico City, estimated Hevi’s value at $440 million in a research note earlier this month.
Neither Megacable nor Grupo Televisa SA, which controls three other Mexican cable providers, has made an offer for Hevi, Vielma said. While Yamuni confirmed yesterday in an interview that he hasn’t approached Hevi, he said he’s interested in purchasing the Guadalajara, Mexico-based carrier.
“If we were a bigger company, we would have many more possibilities to defend ourselves and be more aggressive,” said Yamuni, who like Vielma was in Monterrey for a cable industry conference. “Big companies have the opportunity to create more synergies.”
Dish Mexico, Telmex
Cable carriers are facing competition from Dish Mexico, a satellite-TV joint venture between EchoStar Corp. and MVS Comunicaciones SA, and from Telefonos de Mexico SAB, the nation’s biggest phone and Internet carrier.
Megacable, also based in Guadalajara, has analyzed the costs it could cut by buying the smaller company, said Yamuni, 54. He said he couldn’t disclose the estimate for competitive reasons.
Hevi has cable operations in 10 states and in cities such as Nuevo Laredo, Puerta Vallarta and Irapuato. Megacable’s territory includes Guadalajara, Mexico’s second-biggest city after Mexico City, and other locations across 24 states.
In addition to Hevi, Megacable is interested in buying Cablecom, a Mexico City-based cable operator with about 650,000 TV subscribers, Yamuni said.
‘Sooner or Later’
“They know that we’re interested in getting together with them in a possible purchase,” he said of both Cablecom and Hevi. “We know that sooner or later they’re going to sell.”
Hevi is the fifth-biggest cable carrier in Mexico, following Megacable, Cablemas SA, Cablecom and Empresas Cablevision SAB. Televisa controls Cablemas and Cablevision.
Televisa is interested in consolidating the cable industry, meaning it may buy companies, Executive Vice President Alfonso de Angoitia said on a conference call in October. A Televisa spokesman declined to comment yesterday.
Megacable is waiting for the market to stabilize before making offers for the carriers, Yamuni said. The global economic crisis hurt companies’ market value over the past two years, he said.
Ernesto Tinajero, CEO of closely held Cablecom, didn’t return e-mail messages left with his assistant yesterday, and no one answered at the company’s corporate offices.
Megacable fell 39 pesos to 30.81 pesos at 2:35 p.m. New York time in Mexico City trading. Mexico City-based Televisa gained 43 centavos to 50.88 pesos.
To contact the reporter on this story: Crayton Harrison in Monterrey, Mexico at firstname.lastname@example.org