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News
Clear Channel sells assets
March 6, 2000: 2:23 p.m. ET

Station sales to Infinity, Cox, others to help clear way for purchase of AMFM
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NEW YORK (CNNfn) - Clear Channel Communications is selling 72 radio stations in 27 markets as part of the way of clearing way for its merger with AMFM Inc., the company announced Monday.
    A total price of the sales was not immediately available, but 28 of the stations being sold to a combination of Infinity Broadcasting Corp., Cox Radio Inc. and Hispanic Broadcasting Corp. will bring in $1.9 billion. An analyst believes that, based on those stations' sales price, the company probably received $4.5 billion to $5 billion for all 72 of the stations.
    "I think the point is they're getting what they said they'd get," said Christopher Ensley, analyst with Lazard Freres & Co.
    Ensley said that Infinity paid about 17.5 times 2001 cash flow for the stations it bought, and he believes most stations will go for between 18 to 20 times 2000 cash flow.
    
Hit by criticism in Barron's

    An article in this week's edition of Barron's suggested that Clear Channel was facing trouble ahead because of a drop in advertising by dot.com companies and that would lead to the company getting lower than expected sales prices for these properties. It also raised questions about the price and wisdom of the purchase announced last week of concert promoter SFX Entertainment Inc. (SFX: Research, Estimates) for $4.4 billion.
    Ensley said he disagreed with many of the conclusions of the Barron's piece, but acknowledged that the article was the major factor driving shares of Clear Channel lower in trading Monday.
    "I think there is a natural fit between the concert business and radio," he said. "I don't have any problem with the price."
    
More divestitures to follow

    The deals announced Monday are subject to customary regulatory approval, and contingent upon the closure of the previously announced $17 billion purchase of AMFM (AFM: Research, Estimates) by San Antonio-based Clear Channel (CCU: Research, Estimates). The company said that further divestitures are to be announced in the future.
    The sale to New York-based Infinity (INF: Research, Estimates) includes 18 stations in seven markets for $1.4 billion. It includes three stations in Phoenix, the nation's 15th largest radio market. It moves Infinity into five additional top-50 markets.
    The sale to Atlanta-based Cox (CXR: Research, Estimates) includes seven stations in Houston and Richmond, Va., for $380 million in cash.
    The sale to Dallas-based Hispanic Broadcasting (HBCCA: Research, Estimates) includes three stations in Denver, Phoenix, and Austin, Texas, for about $127 million, which Hispanic said it would finance with cash on hand.
    Hispanic's statement said it would incur losses in 2000 and 2001 due to the launch of the Denver and Austin facilities. Earnings tracker First Call had projected earnings of 76 cents a share this year and $1.20 a share in 2001.
    Two other public companies, Cumulus Media Inc. (CMLS: Research, Estimates) of Milwaukee and Salem Communications Corp. (SALM: Research, Estimates) of Camarillo, Calif., purchased 11 and eight stations, respectively. Details on those purchases were not available from either Clear Channel or the buyers.
    
Stocks affected by sale broadly down

    Shares of Clear Channel fell 6-3/8, or 8.8 percent, to 66 in trading Monday, and the two companies it is in the process of buying also were down sharply. AMFM shares fell 4-3/4, or 7.3 percent, to 60-1/2, while SFX shares fell 4-1/4, or 10 percent, to 38-1/4.
    The companies buying stations weren't fairing much better. Infinity shares fell 2-5/16, or 6.7 percent, to 32-7/16, while Hispanic Broadcasting shares slipped 5/16, or 0.3 percent, to 100-1/8 and Cumulus shares dropped 1-5/16, or 3.6 percent, to 35-5/16.
    Bucking that trend was Cox Radio and Salem. Cox's shares rose 5/8, or 0.8 percent, to 75-3/4, while Salem shares gained 13/32, or 2.7 percent, to 15-17/32. Back to top

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.