Clear Channel Buys Jacor
CINCINNATI (AP) _ Clear Channel Communications Inc. is acquiring Jacor Communications Inc. in a $3.4 billion stock swap, forging a much stronger position in the rapidly evolving radio industry.
The purchase of its coveted rival, announced today, will give Clear Channel 454 radio stations in 101 U.S. markets, as well as 20 television stations and outdoor advertising businesses in 25 countries.
Clear Channel and Jacor last year had combined radio station revenue of about $1.1 billion, which would rank third behind Chancellor Media Corp. and CBS Corp. Clear Channel would rank second in station ownership.
Jacor itself has been an aggressive acquirer since relaxed ownership rules led to an explosion of radio deals since 1996. The company also provides syndicated radio programming, including talk shows featuring Rush Limbaugh, Dr. Dean Edell, Dr. Laura Schlessinger and Art Bell.
In recent years, Clear Channel and Jacor were virtually tied as the second-largest radio company, but slipped down the rankings as CBS acquired Infinity Broadcasting and American Radio Systems, and Chancellor announced plans to acquire Capstar Broadcasting Corp.
Jacor had recently been seen as a takeover target for both CBS and Chancellor, especially since CBS plans to sell part of its radio business to the public in an offering estimated at around $3 billion.
In addition to the purchase price, which is based on Wednesday’s closing price for Clear Channel stock, Clear Channel will assume $1.26 billion in Jacor debt.
Clear Channel shares dropped $2.87 1/2, or 8 percent, to $34.12 1/2 in late morning trading today on the New York Stock Exchange amid a broader selloff in the market. Jacor shares were down 62 1/2 cents at $39.50.
Broadcasting stocks have been hammered during the recent stock market slump as investors worry about an advertising slowdown. From the market’s peak in mid-July through Wednesday, Jacor shares had plunged 38 percent while Clear Channel dropped 40 percent.