Entercom Strikes a Deal to Buy CBS Radio
03 February 2017 - 1:20AM
Dow Jones News
By Anne Steele
Entercom Communications Corp. reached a deal to buy CBS Corp.'s
flagging radio unit, a business the media giant has been looking to
shed for almost a year.
The tax-free merger will form a company with a nationwide
footprint of 244 stations, including 23 of the top 25 U.S. markets,
and a growing events platform. Entercom Chief Executive David Field
will lead the combined company. Andre Fernandez will continue as
CEO of CBS Radio through the deal's closing.
The company will be merged through a so-called reverse Morris
trust, which combines a tax-free spinoff with a prearranged merger.
CBS shareholders will have the opportunity to exchange all, some,
or none of their stock for CBS Radio shares. CBS Radio will then
merge with an Entercom subsidiary, and the new CBS Radio
shareholders will receive Entercom shares in exchange for their CBS
Radio shares.
In all, CBS Radio shareholders will hold about 105 million
Entercom shares, or 72% of the combined company. Existing Entercom
shareholders will own the remaining 28%.
The deal is subject to Entercom shareholder approval. Joseph
Field, Entercom chairman and a controlling shareholder, has agreed
to vote in favor of the transaction.
The tie-up is expected to close during the second half of the
year.
For several years, radio has been seen as a drag on CBS's
results. Last March, CBS CEO Leslie Moonves said the company was
considering strategic options for the radio unit, comprised of 117
stations mostly located in the nation's biggest markets.
Write to Anne Steele at Anne.Steele@wsj.com
(END) Dow Jones Newswires
February 02, 2017 09:05 ET (14:05 GMT)
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