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Argentine MSO Supercanal Seeks Buyer

Buenos Aires, Argentina-The decision by Argentina's No. 3 MSO, Supercanal Holding S.A., to file for bankruptcy protection will likely result in its acquisition by a more established industry player, according to analysts.

One white knight some think may come to the rescue is Grupo Clarín, the country's largest media company. It already owns a 20 percent stake in the 380,000-subscriber MSO through its cable arm, Multicanal S.A, one of Argentina's top MSOs.

"The breakup [of Supercanal] could produce any number of results. But given Clarín's position as a minority shareholder and its profile as Argentina's media heavyweight, I would bet that it would use its leverage to get something," said David Taff, Latin American corporate analyst with Santander Investment in New York.

However, Clarín has denied that it is either interested in increasing or selling its stake in Supercanal, which owes $500 million to bondholders and banks.

"Right now, our stake in Supercanal is worth nothing, and we are not thinking of buying more," Clarín corporate-relations director Jorge Rendo said. "Supercanal needs to undertake a lot of investments before it becomes attractive to us or anyone else."

That is not the view of Daniel Vila, owner of Grupo Uno, the Argentine media company that controls 51.2 percent of Supercanal. He has accused Clarín of blocking a number of viable solutions to Supercanal's problems. Those resolutions have ranged from a debt restructuring to the incorporation of a new foreign investor.

"Multicanal holds only 20 percent of Supercanal, but under the agreement with the company's creditors, its decision-making power was actually much greater," said Vila. MasTec-a holding company owned by the Cuban-American Mas Canosa family-holds the remaining 28.8 percent stake in Supercanal through a subsidiary called Latlink.

A number of high-powered cable investors-such as Denver-based UnitedGlobalCom Inc. and Washington, D.C.-based investment fund Newbridge-have expressed interest in Supercanal in the past, only to be dissuaded by its troubled finances.

Nevertheless, Taff said, renewed interest from international investors in the Argentine cable market could be enough to prompt Multicanal to take control of the firm.

"Supercanal is probably the last cheap [cable] platform that remains, with which global cable investors can attack" Argentina's pay TV market, he added.

At the right price, Supercanal might also be a desirable property for Multicanal rival CableVisión, controlled by Dallas-based private-investment firm Hicks, Muse, Tate & Furst Inc. However, Hicks, Muse has repeatedly said that it, too, has been weary of Supercanal's financial woes.

With a federal judge now in charge of putting Supercanal's financial house in order, analysts said, its partners'squabbles should soon be laid to rest. This, in turn, should allow it to capitalize on its significant market share in the country's 5 million-subscriber cable market.