Cox Enterprises Offers To Take Cox Radio Private
March 23, 2009 at 2:00 PM (PT)
COX ENTERPRISES, INC. is taking COX RADIO private, with a cash tender offer of $3.80/share for all of the outstanding publicly held minority interest in COX RADIO. The offer represents a total payment of about $69.1 million including fees and expenses. The price is a 15.2% premium over FRIDAY's closing price and a 21.8% premium over the 10-day volume weighted average closing price. COX ENTERTPRISES currently owns 78% equity interest and 97% voting interest in COX RADIO; once COX ENTERPRISES holds 90% of the equity, COX RADIO will become a wholly-owned subsidiary of COX ENTERPRISES.
Given how these economic challenges are affecting the radio industry, we believe that private ownership offers advantages that will assist Cox Radio in attaining its business objectives and managing its capital structure.
"COX ENTERPRISES is committed to operating media businesses, and as a private company can take a long-term perspective, which is especially valuable in the current economic environment," said COX ENTERPRISES Pres./CEO JIMMY W. HAYES. "Given how these economic challenges are affecting the radio industry, we believe that private ownership offers advantages that will assist COX RADIO in attaining its business objectives and managing its capital structure. We have confidence in the long-term potential of COX RADIO and its management team. This transaction will allow us to further invest in a quality asset we know well and to best ensure COX RADIO maintains its best-in-class operations."
"COX ENTERPRISES' tender offer provides COX RADIO's shareholders with an excellent opportunity to obtain liquidity at a premium to the current share price," added HAYES. "In addition, because we are fully financing the transaction and structuring it as a tender offer, we anticipate that shareholders will benefit from an expeditious process and quick receipt of payment."
The Board of Directors of COX RADIO will form a special committee of independent directors to assess the proposal with the assistance of outside financial and legal advisors and may make a recommendation to shareholders. Directors of COX RADIO affiliated with COX ENTERPRISES will not participate in the evaluation of the proposal. The tender offer is scheduled to expire on APRIL 17th and is conditional upon a majority of the non-affiliated minority shareholders tendering their shares. CITIGROUP is serving as COX ENTERPRISES' financial advisor for the transaction and dealer manager for the tender offer.
In a just-released statement, COX RADIO noted, "We expect that our Board of Directors will appoint a special committee of independent directors to review and consider the tender offer and make a formal statement to COX RADIO shareholders within 10 business days. Shareholders are advised to take no action at this time with respect to the tender offer pending the review of the tender offer by the special committee ... We expect that this process will have no impact on day-to-day operations."