KHON TV up for sale, in light of offers
"Very exciting, very active" deal-making in broadcasting spurs its owner to take offers
The owner of KHON-TV in Honolulu and its sister stations in Portland, Ore., and Wichita, Kan., KOIN and KSNW, respectively, is exploring a possible sale.
Station officials announced to staff members yesterday that Montecito Broadcast Group LLC has been "approached by a variety of people," CEO George Lilly told the Star-Bulletin.
Given the "very exciting, very active" deal-making under way in the broadcast industry, "it would be foolish, businesswise, not to listen to whatever offers are out there."
KHON OWNERS, OVER THE YEARS
2005: SJL/Blackstone, now known as Montecito Broadcast Group, based in California, purchased KHON, KOIN-TV Portland, Ore., and KSNW-TV in Wichita, Kan., for $259 million.
1998: Emmis Communications Corp. of Indiana purchased the station from SF Broadcasting, controlled by Barry Diller's USA Networks Inc.
1995: SF Broadcasting Co. acquired KHON and two other stations from Chicago-based Burnham Broadcasting Co. for $229 million.
Source: Star-Bulletin reports
The company will not retain a broker and will keep the window open to potential suitors for "possibly six weeks, and that should be about it," Lilly said.
The stations will not be sold if offers are not suitable or buyers are not serious or qualified, he said.
Montecito bought the stations from Indiana-based Emmis Communications Corp. in 2005.
KHON-TV and its sister stations in Oregon and Kansas might be sold, again.
Station officials announced to their respective staffs yesterday that parent company Montecito Broadcast Group LLC had received an unsolicited offer for the station group and has opened a brief window of opportunity to entertain additional offers.
It was not the first expression of interest, Montecito Chief Executive Officer George Lilly told the Star-Bulletin.
"A variety of people" approached Montecito and were told "that's not our plan," he said. However, with a flurry of "very exciting, very active" deal-making swirling through the broadcast industry, it would be "foolish, businesswise, not to listen to whatever offers are out there," Lilly said via cell phone from the annual CBS affiliates convention in Las Vegas.
Rick Blangiardi, senior vice president and general manager at KGMB who oversaw KHON before its 2005 sale and his 2006 resignation, was also at the convention. He was in meetings and could not be reached for comment.
So as not to disrupt staff or operations for an extended period, Lilly said, "we will open the window for a very short time. ... I would think possibly six weeks, and that should be about it."
If a serious and qualified buyer comes forward, any sale would take much longer than six weeks to complete. Absent such a suitor, the window will close in the allotted time, Lilly said.
Montecito will not retain a broker, he said.
"As little as a month ago ... Montecito was out looking to build the group," said Joe McNamara, KHON president and general manager. "We're sort of a small asset for our partner," the Blackstone Group, a private equity firm accustomed to making multibillion-dollar deals.
Blackstone backed Lilly's SJL Broadcast Group in its 2005, $259 million purchase of KHON, KOIN-TV in Portland, Wichita's KSNW-TV and its satellite stations in Kansas from Indiana-based Emmis Communications Corp.
"I think what happened was, one party came in and said, 'Look, we're interested,' and threw some number on the table -- and (Montecito) thought they'd see what, currently, other people have to offer."
No hiring freeze or any typical pre-sale restrictions have been instituted, McNamara said.
It's "business as usual," he said, adding that KHON is in the process of spending about $500,000 on a new newsroom system.
Montecito's intentions to briefly explore a sale were announced to staff because "it's not fair for our people to hear it from other sources than ourselves," Lilly said. "We just believe ... if there's anything happening within our company of major significance, they have a right to know."