Shares of LIN TV climbed as much as 6.5% Friday, one day after Reuters reported that the television broadcaster has hired an investment bank to advise on a potential sale of the company.
LIN TV, which operates 23 network-affiliated TV stations, could sell for $32 a share based on the average valuation companies in its industry have attracted, Legg Mason analyst Sean Buston said in a research note on Friday. That could equate to a deal valued at about $1.6 billion.
LIN TV said it had no comment on the matter. Its shares were up $1.07 to $21.17 at midday on the New York Stock Exchange after rising as high as $21.40 earlier in the session.
Prominent Dallas-based private equity firm Hicks, Muse, Tate & Furst bought LIN TV in a $1.7 billion transaction in 1998. Hicks, Muse currently owns a 46 percent stake in the company and is looking to unwind that investment, sources close to the situation said.
Both strategic and financial buyers may take an interest in LIN TV, which counts a lucrative joint venture with NBC and newly acquired stations in Puerto Rico among its assets, according to the sources.
LIN TV sold an 80% stake in its Dallas NBC affiliate to the NBC joint venture back when it was acquired by Hicks, Muse. It took in more than $800 million and a 20% stake in NBC's San Diego station as part of the deal.
Continuing uncertainty about regulation over television station ownership could throw a wrench in any sale plans, and Standard & Poor's theorized on Friday that the issue could hurt near-term interest in the LIN TV assets by competitors in the sector.