03 February, 2017
CBS Corp. has unveiled plans to merge its radio division with Philadelphia-based Entercom, creating a broadcast platform with 244 stations and national reach across major markets.
The deal, subject to regulatory approvals and a vote by Entercom's board, is expected to close in the second half of the year.
Four Pittsburgh stations, including landmark KDKA-AM, are part of the deal. The complex merger agreement that will leave CBS shareholders with 72% of the enlarged Entercom is said to have come together in the past few weeks.
CBS (CBS) wanted to sell its radio group, and then when no firm bidder appeared, planned to spin it off as a separately traded stock early this year.
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CBS is around three times the size of Entercom, and CBS investors, including JPMorgan and the Vanguard mutual funds, will hold of most shares in the combined company. Existing Entercom shareholders would own the remaining 28% of the combined company.
What the merger means for the Boston audience isn't exactly clear, but FCC regulations limit the number of stations one entity can own per market, and Entercom said it must divest about 15 stations nationwide. David Field will continue as the CEO and the company will continue to trade under the ticker symbol ETM.
The tax-free merger will form a company with a nationwide footprint of 244 stations, including 23 of the top 25 US markets, and a growing events platform.
Pro forma revenue (trailing 12 months) was about $1.7B, which would track to the second-largest radio station owner, and EBITDA was nearly $500M when transaction synergies are included.