Clear Channel Acquires 55 Stations
ATLANTA (AP) _ Cumulus Media Inc., the country’s third-largest broadcasting company, will transfer 55 stations in 10 markets to Texas-based Clear Channel Communications.
Cumulus, which has been troubled with massive debt and 11 shareholder lawsuits over its finances, also said it will buy five stations Clear Channel is selling in Cedar Rapids, Iowa; Shreveport, La.; and Melbourne, Fla.
In return, Clear Channel will acquire 25 stations from Cumulus for $91 million, the company announced Tuesday. The Justice Department approved that acquisition last week, Cumulus said.
In a second part of the deal, Cumulus will sell another 30 stations in five markets to Clear Channel, based in San Antonio, for about $75 million. That transaction, pending regulatory approval, is expected to close later this year.
Cumulus, which moved its headquarters to Atlanta from Milwaukee last month, has grown quickly from fewer than 30 stations three years ago into a nationwide network of more than 300..
But the rapid growth was blamed by some analysts for the company’s flagging stock price and debt-laden balance sheets. In March, the company restated earnings and cash flow over three quarters from last year, triggering several shareholder lawsuits.
The firm’s auditor resigned in April, citing the discovery of ``material weaknesses″ in the company’s internal controls.
Once the transactions are completed, Cumulus will have 250 stations in 50 markets.
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