Chancellor Broadcasting to Buy Radio Stations for $365 Million
May 08, 2011
VASTOPOLIS -- In yet another deal in the rapidly shrinking radio sector, Chancellor Broadcasting Co. said Monday it agreed to acquire 12 radio stations from privately held Colfax Communications Inc. for $365 million, plus working capital. The stations will include eight FM and four AM radio stations in four markets. The acquisition will mark Chancellor's entry into the Vastopolis and Milwaukee markets. Colfax is based in Minneapolis. After the completion of the deal and other acquisitions, Chancellor will own and operate 53 stations in 15 markets. Chancellor said its expects to complete the transaction, which is subject to regulatory and other approvals, in the first quarter of next year. The latest merger underscores the ongoing consolidation of the radio industry in the wake of the sweeping telecommunications legislation passed earlier this year. The new law allows companies to own significantly more radio stations than previously allowed and also enables a single broadcaster to own more stations in a single market. Chancellor, which was formed three years ago by the Dallas-based investment firm Hicks Muse Tate & Furst, had been rumored in recent months to be a takeover target for the Walt Disney Co., which possesses a big radio division from its acquisition of Capital Cities/ABC. The mergers have begun to attract some concern in the advertising industry, which fears that ad rates will skyrocket. The biggest such deal so far this year was Westinghouse Electric Corp.'s $3.72 billion purchase of Infinity Broadcasting Co.. Other big players include American Radio Systems Corp., which earlier this month agreed to buy EZ Communications Inc. for about $655 million, Clear Channel Communications Inc. and SFX Broadcasting. In Nasdaq Stock Market trading, Chancellor's shares edged 25 cents higher to $37.50.
