CCU has pulled back over it's merger with AMFM and SFX, in addition to a BS article in Barron's over the weekend.
I've made some risky buys in March and April options, but also loaded up on ATM '02 leaps.
>>
Monday March 6, 3:09 pm Eastern Time
FOCUS-Clear Channel selling radio stations, shrs hit
(stands as 1STLD to LEISURE-RADIO, updates with stock down, analyst comment, pvs San Antonio)
By Steve James
NEW YORK, March 6 (Reuters) - Clear Channel Communications Inc. (NYSE:CCU - news), the largest U.S. radio operator, tuned in some interference on Monday when its stock dropped after a report it faces uncertain growth prospects.
Clear Channel's announcement that it was selling off 72 radio stations to comply with regulatory requirements in conjunction with its pending merger with another radio operator AMFM Inc. (NYSE:AFM - news), did little to reverse the slide.
Clear Channel last week said it plans to spend $4.4 billion, to acquire sports and entertainment promoter SFX Entertainment Inc. (NYSE:SFX - news).
The stock was down 6-3/4 at 65-5/8 in midafternoon trade on the New York Stock Exchange a day after a cover story in the business magazine Barron's said Clear Channel's growth outlook was uncertain.
The radio operator, with revenues of $2.68 billion last year, may have to slow its growth-by-acquisition strategy despite its $4.4 billion stock-and-debt assumption bid for SFX, announced last week, said Barron's.
The magazine raised concerns about SFX's growth rate, Clear Channel's competition from subscription satellite broadcasters, and its tougher road to expand advertising revenues.
The ``game of putting physical assets together is in inning No. 7 or 8,' Randall Mays, the company's chief financial officer, said.
San Antonio-based Clear Channel had no immediate comment Monday on the radio sell-off or Barron's assessment.
To be sure, PaineWebber analyst Leland Westerfield dismissed the gloomy Barron's outlook and said the Wall Street setback appeared to be only temporary.
``When the smoke clears, investors will reward CCU for its divestiture work and healthy growth prospects,' he told Reuters. ``Movement in the market is misplaced and attributed to the weekend article' in Barron's.
In contrast to the magazine report, Westerfield said Clear Channel's prospects were for ``solid growth' and he pointed to Monday's announcement of station sales.
The proposed divestitures, which are subject to regulatory approval and also contingent on the closing of the AMFM merger, involve other major radio operators including Cox Radio Inc. (NYSE:CXR - news), Infinity Broadcasting (NYSE:INF - news) and Hispanic Broadcasting Corp. (NasdaqNM:HBCCA - news).
After the AMFM merger is completed this year, Clear Channel will operate around 874 radio and 19 television stations in the United States. It also has equity interests in over 240 radio stations internationally. Clear Channel also operates more than 550,000 outdoor advertising displays, including billboards, street furniture and transit panels across the world.
Infinity Broadcasting, a subsidiary of CBS Corp. (NYSE:CBS - news), said it would acquire 18 stations in Cleveland, Cincinnati, Denver, Orlando, Phoenix, San Diego and Greensboro, N.C., from Clear Channel for about $1.4 billion.
``This acquisition is consistent with Infinity's strategy of acquiring radio and outdoor properties in the nation's largest revenue markets,' said Chairman and Chief Executive Mel Karmazin.
``It expands the company's presence into five new top-50 markets while increasing our position in the communities Infinity Radio already serves.'
Atlanta-based Cox Radio said it would acquire three FM stations serving Houston and three FM stations and one AM station serving Richmond, Va., for a total of $380 million in cash.
Cox President and Chief Executive Robert Neil said: ``We are extremely excited about the growth opportunities these acquisitions bring to Cox Radio and our shareholders. Houston and Richmond are both fast-growing markets with attractive demographics.'
In Dallas, Hispanic Broadcasting said it would acquire three Spanish-language FM stations -- in Denver, Phoenix and Austin, Texas -- for about $127 million in cash.
LoF |
