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Chancellor acquires LIN
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July 7, 1998: 1:17 p.m. ET
Radio broadcaster enters TV business with $1.5B stock and debt deal
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NEW YORK (CNNfn) - Chancellor Media Corp., the second-largest radio broadcaster in the United States, said Tuesday it has agreed to buy LIN Television Corp. for stock and debt valued at approximately $1.5 billion.
Chancellor owns and operates 108 radio stations in the United States. LIN, which owns and operates 12 network-affiliated television stations, is the 22nd-largest TV broadcaster in the United States.
The LIN deal marks Chancellor's entry into the television broadcasting industry.
Jeffrey Marcus, Chancellor's president and chief executive officer, told CNNfn the deal expands on Chancellor's strategy to offer cross-promotional packages to advertisers in different regions.
Last month, Chancellor acquired outdoor billboard advertiser Martin Media L.P.
"Our goal is to [develop] a multimedia strategy where we build radio, build TV, build outdoor [advertising] in individual markets," Marcus said. "We want to offer advertisers the widest range of options available."
Marcus shrugged off any notions that the deal could be derailed by heavy federal antitrust scrutiny, pointing out there are no regulations regarding owning companies in the different medium.
"You can own just so much radio in a market, so much TV, and there's no practical limit on outdoor [advertising] at this point," he said.
Two to go
LIN is owned by privately held buyout firm Hicks, Muse, Tate & Furst Inc., which bought LIN for $2 billion in March. Hicks Muse is also Chancellor's largest shareholder, with a 9 percent stake in the company. After the deal, Hicks Muse will have an 18 percent interest.
Tuesday's deal leaves Hicks, Muse with two media outlets: Capstar Broadcasting Corp. and Sunrise Television Corp. Marcus said Chancellor would purchase either of those companies if the price were right. [181K WAV] or [181K AIFF]
Chancellor shares (AMFM) slipped 1-13/16 to 52 in midday trading.
Under terms of the agreement, Chancellor will assume approximately $769 million of LIN debt and issue 0.03 share of Chancellor stock for each LIN share, or a total of 17.7 million shares.
The deal is based on the $51 a share price of Chancellor stock on July 1. The boards of both companies have approved the deal, which they expect to be completed in the fourth quarter.
Chancellor said it will reimburse Hicks Muse for LIN's financial assets, which it valued at $125 million. Chancellor said those assets are expected to include an equity interest in a major league sports franchise in Dallas.
The companies said Gary Chapman, LIN president and chief executive officer, has been named president of Chancellor Media's television operations and will join Chancellor's board of directors.
In addition to its network affiliate stations, LIN also broadcasts the Local Weather Station service, which provides travel forecasts and weather trends over local area cable television systems. 
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LIN Television
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