The board of Mexico’s Megacable rejected Grupo Televisa’s offer to merge the firms’ pay TV and broadband operations, according to a statement from Televisa on Tuesday.
Televisa in November offered a deal to merge its cable and broadband unit Izzi with its smaller listed rival Megacable, Reuters reported exclusively on Monday.
Televisa said in its statement Tuesday that Megacable responded to reject the proposal, noting that the Chairman of the Board of Megacable is the only person empowered to deal with this matter. Televisa’s Nov. 14 offer letter, seen by Reuters, was addressed to Megacable’s board of directors.
“We believe that the market clearly understands the industrial logic of this transaction, considering today’s market reaction to press reports regarding the proposal,” Televisa said.
Shares of both companies surged earlier on Tuesday after the offer was reported, with trading eventually suspended by regulators. Trading of Televisa resumed shortly after.
Televisa’s stock-for-stock offer would have resulted in Megacable’s shareholders owning about 45% of the merged company with Televisa at about 55%, Televisa’s offer said. Nasdaq