AOL is negotiating stake in Chancellor
NEW YORK, April 29 (Reuters) - America Online Inc. (AOL - news) is negotiating to buy an equity stake for about $250 million in Dallas-based Chancellor Media Corp. (AMFM - news), one of the nation's largest radio broadcasters, Business Week reported Thursday.
The deal will enable AOL, the world's leading Internet service provider, to broadcast Chancellor's programming across the AOL system on the Internet, the weekly business magazine said. The magazine said a source close to the deal disclosed that the talks began in early April and could conclude with an agreed deal in May.
News of the talks comes just weeks after AOL's main Internet portal rival, Yahoo! (YHOO - news), agreed to pay $5.6 billion for Broadcast.com Inc. (BCST - news), the top provider of audio and video programming over the Internet.
The magazine said AOL's $250-million investment into Chancellor would be in exchange for exclusive rights to feature the company's stations on the Internet.
Chancellor has been looking to sell itself or spin off some off its divisions to boost its sagging stock price. A major shareholder in Chancellor, one of the nation's largest radio broadcasters, is the Dallas-based buyout firm Hicks, Muse, Tate & Furst Inc. As of mid-Feburary, Hicks Muse owned about 26 percent of Chancellor.
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