TINTA Gobbles Up Large Latino Programmer

8/30/1998 8:00 PM Eastern

Buenos Aires, Argentina -- Tele-Communications
International Inc. (TINTA) fulfilled its goal of owning a heavyweight Latin American
network company with its purchase of Argentina's Pramer, one of the largest network
groups in the region.

The deal, announced last week, superseded a memorandum of
understanding inked earlier this year that would have seen TINTA control Pramer with CEI
Citicorp Holdings S.A. through their jointly owned sports-programming company, Torneos y
Competencias S.A. (TyC).

Pramer, based here, was wholly owned by Argentine
entrepreneur Eduardo Eurnekian -- the same man who sold off some of his interest in the
large Argentine MSO then known as CableVisión to TINTA a few years ago.

TINTA didn't disclose a price on the new deal. Market
sources valued Pramer -- which owns 11 pay TV channels and distributes another five -- at
$80 million to $85 million. They noted that TINTA's partially owned Argentine systems
company -- which is now called CableVisión/TCI2 -- has been paying about $2.5
million per year for access to at least six of the Pramer channels.

TINTA's deal comes after months of negotiations
between Eurnekian and CEI, building on the memorandum. But CEI's talks failed to bear
fruit, and the memorandum was allowed to lapse last month.

CEI is an investment company that has gobbled up several
media outlets in Argentina during the past year, and it is a coinvestor with TINTA in both
TyC and CableVisión/TCI2.

A TINTA spokeswoman said it was more
"expeditious" for the company to buy Pramer on its own, while CEI digests its

Pramer's potential for TINTA goes well beyond
Argentina's borders, as the company is becoming more regional in focus. Last week,
Pramer aggressively pushed its product at the Andina Link trade show in Cartagena,

Its fully owned lineup includes channels ranging from
children's programming to sports, and it also represents an Argentine broadcast
network and a cable-news channel owned by Eurnekian's Grupo Multimedios América,
along with two music channels owned by the independent Grupo 21.

Local analysts said TINTA will be able to expand the range
of these channels. They also noted that the U.S.-based company could establish a Southern
Cone beachhead for other networks, such as Discovery Channel Latin America and The Box,
which are owned by two of TINTA's corporate cousins -- Liberty Media Group and TCI
Music, respectively.

With the lapse of the original deal, TyC has apparently
lost an opportunity to fulfill its stated goal of moving beyond sports programming and
into general entertainment.

It was TyC's founder and chief, Carlos Avila, who held
the failed negotiations with Eurnekian before TINTA snapped up Pramer. Ironically, Avila
also conducted the negotiations that led to Eurnekian selling off the stake in
CableVisión to TINTA.

Still to be seen is how TINTA's relationship with CEI
and Spanish telco Telefónica Internacional de España S.A., another partner in
CableVisión/TCI2, will be affected by the Pramer purchase.

TINTA has operated the system in the past. But people
familiar with the company said changes could result from the recent appointment of Emilio
Rodiño as CableVisión's CEO and from the recent $720 million investment in CEI by
Dallas-based investment firm Hicks, Muse Tate & Furst Inc.

TINTA currently holds 26 percent of CableVisión, with CEI
and Telefónica. each holding 33 percent.

Hicks, Muse also has a management contract with BGS, a
company formed by Julio Gutiérrez and Julio Baqueriza, the independent cable operators
who helped to found Mandeville Partners, which was later sold to CableVisión/TCI2.

Some sources speculated that BGS might want to try its
cable-management expertise at CableVisión/TCI2, while TINTA concentrates on
content development.

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