Entercom Will Purchase CBS Corp.’s Radio Assets

CBS had long been rumored to be looking for a buyer for its radio assets February 2, 2017
BALA CYNWYD, Pa. — Entercom Communications Corp. and CBS Corp. announced early Thursday morning that Entercom will take over CBS’ radio assets in a “tax free merger.” CBS had long been rumored to be looking for a buyer for its radio business.
 
According to the announcement, “the combined company will be known as Entercom and will be headquartered in Philadelphia, with a significant ongoing presence in New York.” In total, the new company will have 244 stations as well as digital assets and events.
 
When the deal is completed, the new board of directors will consists of five current Entercom directors, including David Field as chairman of the board, and four directors nominated by CBS Radio. Andre Fernandez will continue as president and CEO of CBS Radio through the closing of the transaction.
 
The sale of CBS’s radio business to Entercom will be effected through a “Reverse Morris Trust” transaction, according to the announcement. The transaction is subject to approval by Entercom shareholders. Entercom Chairman Joseph M. Field, a controlling shareholder of Entercom, has agreed to vote in favor of the transaction.
 
CBS shareholders will have the opportunity to exchange their CBS shares for CBS Radio shares. Immediately following the completion of this offer, CBS Radio will merge with an Entercom subsidiary, with the new CBS Radio shareholders receiving Entercom shares in exchange for their CBS Radio shares. After the merger, CBS Radio shareholders will receive approximately 105 million Entercom shares, or 72% of all outstanding shares of the combined company on a fully diluted basis. Existing Entercom shareholders will own 28% of the combined company on a fully diluted basis.
 
In the announcement, Field cited “scale-driven efficiencies and opportunities to compete more effectively with other media” as reasons for the merger. The combined companies’ pro forma revenue on a trailing 12 months basis was approximately $1.7 billion, which, according to the release, makes the combined companies the second-largest radio owner by revenue. 
 
The transaction is expected to close during the second half of 2017, subject to certain regulatory approvals and other customary closing conditions.
 

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