HICKS MUSE TO BUY SFX'S RADIO STATIONS; 71 OUTLETS TO COST $1.2 BILLION.

Byline: Skip Wollenberg Associated Press 

Hicks Muse Tate & Furst Inc., already a sizable force in the media business, is paying $1.2 billion in cash for the radio stations owned by SFX Broadcasting Inc.

The Dallas-based buyout firm is making the purchase with its Capstar Broadcasting Corp. affiliate, which already owns more radio stations than anyone else with 243. SFX's 71 stations will give Capstar 314 radio outlets.

Analysts estimated the deal that was announced Monday will make Capstar the third-biggest radio group in terms of revenue behind Westinghouse Electric Corp.'s CBS unit and the planned Chancellor-Evergreen Media combination expected to occur next month.

The SFX acquisition underscores the consolidation frenzy that has engulfed the radio industry since an overhaul of telecommunications laws last year freed companies to own more radio stations in a market.

The deal will take Capstar into larger markets. More than half of SFX's stations are in markets that rank among the 50 largest in the country, while Capstar traditionally has owned stations in markets ranking 50th to 150th.

Hicks Muse and Capstar are paying $75 a share in cash for each of SFX's Class A shares. The shares had traded below $25 a share late last year.

In trading Monday on the Nasdaq Stock Market, SFX Class A shares jumped 9.2 percent, or by $6.12-1/4, to $74.12-1/2 a share.

It is paying $97.50 a share for each of the Class B shares held by senior management of SFX.

Thomas O. Hicks, chairman and chief executive of Hicks Muse, will be chairman of the combined Capstar-SFX.

The Capstar-SFX management team will continue to be led by R. Steven Hicks, Thomas' brother, as president and chief executive. No changes are planned for SFX station management, personnel or station format.

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Photo: (Color) THOMAS O. HICKS