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Chancellor: Adios, Grupo
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October 16, 1998: 12:49 p.m. ET
U.S. radio giant calls off deal with leading Mexican broadcasting company
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NEW YORK (CNNfn) - Chancellor Media Corp. is terminating its agreement to buy a 50 percent stake in Grupo Radio Centro S.A. de C.V., one of Mexico's leading radio broadcasting companies, Grupo Radio said Friday.
The Mexican company said it will fight to enforce the agreement.
Chancellor, set to become the largest U.S. radio broadcaster through a series of recent acquisitions, notified Grupo Radio of its decision Thgursday, Grupo Radio said.
Chancellor gave no reason for terminating the pact, the Mexican company said, and Chancellor officials weren't available for comment.
Why Grupo, why now?
The deal's cancellation comes on the heels of Chancellor's aggressive buying spree in the radio, advertising and television industries over the summer.
In June, it agreed to acquire LIN Television Corp. for $1.5 billion, as well as outdoor advertiser Martin Media L.P. for $610 million. In August, Chancellor purchased six Cleveland radio stations for $275 million, then bought Whiteco Outdoor Advertising for $930 million.
The deal with Grupo Radio fell squarely in the middle of the company's acquisition spree. In July, Chancellor signed a definitive agreement to purchase a 50 percent stake in Grupo Radio for about $237 million. Chancellor's stake would have been a non-controlling interest.
When the deal was announced July 10, Grupo Radio's American depositary receipts (RC) soared 20 percent to 12-1/2, and Chancellor shares (AMFM) stood at 53.
In late Friday morning trade in New York, Chancellor stock was up 1-11/16 at 32, and Grupo Radio ADRs were up 1/16 at 5-1/16. 
-- from staff and wire reports
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