CBS, which said it would sell or spin off its radio division, says it made a deal to merge CBS Radio with Entercom.
The tax-free merger creates a radio company with 244 stations that covers 23 of the top 25 U.S. markets. It would be the No. 2 radio owner with revenues of about $1.7 billion.
“This agreement is great for shareholders and achieves our previously stated objectives by separating our radio business in the best possible way,” said Leslie Moonves, chairman and CEO, CBS Corporation. “Entercom is a superbly run company, and together with CBS Radio’s powerful brands and remarkable people, we are creating an organization that will be even better positioned to succeed in this rapidly evolving media landscape.”
The combined radio company—which will be called Entercom and have its headquarters in Philadelphia—will be headed by David J. Field, president and CEO of Entercom.
“These two great companies, with their impressive histories, complementary assets, and premier content and brands, are a perfect strategic and cultural fit, enabling us to deliver local connection on a national scale and drive accelerated growth,” Field said. “We look forward to welcoming our talented new colleagues at CBS Radio, and we have the utmost respect for their significant contributions to the industry.”
Andre Fernandez will continue as president and CEO of CBS Radio through the closing of the transaction.
As part of the transaction, CBS shareholders will have the opportunity to exchange all, some, or none of their CBS shares for CBS Radio shares.
Immediately following the completion of this exchange 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 in the transaction.
After completion of 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.
The transaction is expected to close during the second half of 2017, subject to certain regulatory approvals.