• by Joe Mandese  @mp_joemandese, March 10, 2006

In a sign that the private equity marketplace is trying to seize more control over publicly traded media assets, a consortium of buyout firms Thursday submitted a formal offer to acquire newspaper giant Knight Ridder, and another group is eyeing Spanish-language broadcasting giant Univision. The latest deals, reported Friday morning by Reuters, come days after Dutch publishing and media research giant VNU accepted an offer to be taken private by a group of private equity firms.

The VNU deal, however, remains in doubt as some key shareholders oppose the sale. Meanwhile, Reuters reports that a consortium consisting of Bain Capital, Hellman & Friedman, Texas Pacific Group, and Thomas H. Lee Partners submitted a formal offer to acquire Knight Ridder, and another group of investors including Mexican broadcaster Televisa, U.S. private equity firm Providence Equity, U.S. billionaire Haim Saban and the Cisneros family of Venezuela is planning to launch a bid to acquire Univision.

On Thursday, PricewaterhouseCoopers released a report projecting that mergers and acquisitions in the media industry are on a "strong growth trajectory" and that 2006 would "reach levels not seen since 2001." The report, "2006 M&A Insights - US Entertainment and Media Industry," said the activity is being driven by several factors including the convergence of media, communications and technology; shifting consumer media consumption habits; and the increasing involvement and influence of private equity firms in deal making activity.

PwC estimates that the 2005 M&A market for media wrapped up with about $72 billion in deal values, an increase of 17.5 percent over 2004. The number of deals closed rose 2 percent to 252.

"Based on activity we've seen so far, it appears that the [entertainment and media] industry is on a fast track to achieve greater deal volume and higher deal value in 2006 than in 2005," stated Thomas Rooney, transaction services leader of PwC's Entertainment & Media Practice. "In addition to mega-deals with the potential to change the competitive landscape in [entertainment and media], we expect middle- market deals of all sizes, and across all sectors, to see increased activity in both value and volume."

Rooney said the appetite of private equity firms for strong media assets is a key factor fueling the growth.