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Westwood to buy Metro
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June 2, 1999: 12:46 p.m. ET
$900M stock swap will combine radio networks that provide traffic reports
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NEW YORK (CNNfn) - Radio programmer Westwood One Inc. said Wednesday it will buy Metro Networks Inc. for about $900 million in stock, combining two companies that provide in-the-air traffic reports as well as news, sports and entertainment broadcasting.
Under the deal, each share of Metro (MTNT) common stock will be converted into 1.5 shares of Westwood One (WON) stock. Westwood will issue about 26 million shares valued at $900 million, based on a price of 35 for each Westwood share. There is no floor or ceiling in determining the exchange ratio, the companies said.
Shares of Metro Networks were down 5-7/8 at 49-5/8 early Wednesday afternoon as investors assessed the deal. Westwood One was down 11/32 at 34-21/32.
The two companies said they hope to close the deal by this fall, after the required Hart-Scott-Rodino antitrust waiting period. Shareholders also must approve the deal.
Westwood operates the Shadow Traffic service, while Metro runs Metro Traffic. Regulators may want to look at whether the merger raises any anti-competition concerns, but the deal probably won't encounter any major problems, said Michael Kupinski, senior media analyst at A.G. Edwards.
"I view that as a very slim prospect," he said of regulatory stumbling blocks. He said that the two companies operate their traffic businesses in different markets. A.G. Edwards has a "buy" rating on Metro Networks.
Westwood One, based in Culver City, Calif., contracts its programs to more than 5,000 radio stations in the U.S. and abroad. Houston-based Metro Networks Inc. serves more than 2,000 radio and TV stations in six countries. 
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