The board of Citadel Communications, owner of 143 FM and 66 AM stations in forty-four markets across the US, has reportedly approved a takeover bid from leveraged buyout specialist Forstmann Little & Company.
Forstmann has offered $26 per share, a 48.6% mark-up on the stock’s current price, valuing the deal at around $1 billion payable in cash. It will also take on $1bn of debt.
Despite the economic downturn and a forecast slump in advertising - the radio industry’s chief source of revenue - Theodore J Forstmann believes that Citadel can prosper from the deal.
“We're prepared for a not exactly exciting patch here,” he explained. “We've accommodated it. But we've got a lot to do and now we can do it in the peace and security of a private company.”
Citadel’s founder and chief executive Larry Wilson added that it was the uncertainty within the economy that had prompted the sale. “The choppy public market, the debt level and facing the possibility of a slowing economy made me consider selling out,” he explained.
The deal awaits approval by shareholders and the Federal Communications Commission.
News source: New York Times