ABC RADIO PLANS TO MERGE WITH CITADEL BROADCASTING.
The Walt Disney Co. announced plans Monday to merge its ABC Radio assets with Citadel Broadcasting Corp. in a cash-and-stock deal valued at approximately $2.7 billion.
Boards of directors at both companies have approved the move to combine ABC Radio, which includes 22 radio stations and the ABC Radio Networks, with Citadel by the end of the year. The newly combined company, Citadel Communications, will be the third largest radio group in the country, reaching more than 50 markets.
As part of the deal, Disney shareholders will own approximately 52 percent of Citadel, while The Walt Disney Co. will retain $1.4 billion to $1.65 billion in cash, depending on the market price of Citadel when the deal closes. Citadel shareholders will own the remaining 48 percent of the combined company.
Robert Iger, chief executive officer of Disney, characterized the move as an ``opportunity to offer Disney shareholders ownership in a new radio leader that will be well positioned for long-term success.'' But industry trackers said the move will likely instill trepidation among ABC Radio executives as Citadel executives learn to harness a much larger corporation.
As a result of the transaction, 14 FM and 8 AM ABC radio stations in nine major markets - including KLOS-FM (95.5) and KABC-AM (790) in Los Angeles - will join Citadel Communications. The deal does not include Disney's ESPN and Radio Disney networks.
``This is going to rock the boat at ABC,'' said Tom Taylor, editor-in- chief of Inside Radio, a trade publication based in Littleton, N.H. ``There hasn't been much turnover at ABC Radio for a long time. There isn't a culture of change there.''
Not so at Citadel. The Las Vegas-based company was founded in 1984 and has garnered a reputation as an aggressive suitor. The company owns and operates 177 FM and 66 AM radio stations, with formats that span the spectrum.
In Citadel's most recent quarter, the company saw revenue of $109.6 million, compared with $107.5 million in the prior year.
ABC Radio, with 51 AM and 20 FM stations, also creates and distributes programming to more than 4,000 affiliates, with Paul Harvey News and Comment and The Sean Hannity Show among the group's flagship programs.
Under terms of the merger, Citadel will deliver ABC News Radio programming to terrestrial radio stations, while Disney will continue to deliver ABC News content via wireless, broadband and satellite.
Shares of Citadel rose 4 cents on Monday to close at $12 on the New York Stock Exchange.
Evan Pondel, (818) 713-3662
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|Publication:||Daily News (Los Angeles, CA)|
|Date:||Feb 7, 2006|
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