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Monday, October 4, 1999


Clear Channel
to buy AMFM for
$23.5 billion

The radio broadcast company
being acquired operates
7 stations in Hawaii

Bloomberg News

Tapa

SAN ANTONIO -- Clear Channel Communications Inc. agreed to buy No. 1 radio broadcaster AMFM Inc. for $23.5 billion in stock and assumed debt, doubling its stations and allowing the company to bundle advertising sales across radio, billboards and television.

Clear Channel, the third-biggest radio company, will exchange 0.94 share, or $75.55, for each share of AMFM, which was formed by Dallas buyout firm Hicks, Muse, Tate & Furst Inc. That's 18 percent more than Friday's price. About $6.1 billion of debt will be assumed.

Clear Channel will have 830 radio stations, including 47 in the 50 largest U.S. markets, and an estimated $5.0 billion in revenue. (In Hawaii, AMFM owns KSSK-AM and -FM, KKLV-FM, KHVH-AM, KIKI-AM and -FM, and KUCD-FM.)

Clear Channel also will have more than 425,000 outdoor-advertising displays and 19 TV stations. The company says it will be the world's biggest seller of advertising on radio and billboards.

"It's such a great match and a great price," said Storm Boswick, an analyst at J & W Seligman & Co., which owned 2.5 percent of AMFM as of June 30.

Clear Channel had been in talks to buy AMFM's radio operations earlier this year, when AMFM, then known as Chancellor Media Corp., also owned an outdoor-advertising business and was preparing to enter the television-station business.

AMFM in March scrapped plans to expand into TV and sold its billboard business to Lamar Advertising Co. for $1.9 billion. AMFM owns about 30 percent of Lamar.

"I think it was finally spurred by the CBS-Viacom merger," said Boswick, referring to Viacom Inc.'s planned about $37 billion purchase of CBS Corp., the biggest media acquisition ever. "It was apparent that this combination would benefit both companies a year ago."

Shares of AMFM rose $1.31 to $65.19 while Clear Channel fell $3.87 to $76.50.

The purchase highlights the dramatic change in the U.S. radio industry, which less than five years ago was made up of many small, independently owned stations. Since 1996 though, a loosening in federal ownership rules have resulted in a flurry of acquisitions and left three -- now two -- major U.S. radio station owners -- Clear Channel, AMFM and Infinity Broadcasting Corp., which is owned by CBS. Clear Channel said the new company, which will be headed by Clear Channel Chairman and CEO Lowry Mays, may sell 125 radio stations to get regulatory approval for the merger.



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