Cox Enterprises to Buy Out Its Radio Unit | Adweek
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Cox Enterprises to Buy Out Its Radio Unit

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Cox Enterprises announced Monday (March 23) a deal to take Cox Radio private. The company, which owns a 78 percent equity in Cox Radio, is making a cash tender offer for all the outstanding shares of Cox Radio valued at $69.1 million. The offer, which expires April 17, represents a 15.2 percent premium over Friday's closing price.

If after the tender offer Cox Enterprises owns 90 percent of Cox Radio's equity, Cox Radio would become a wholly-owned subsidiary of Cox Enterprises.

The fifth largest radio group, Cox Radio, like other radio companies, has been struggling with a sinking economy and soft ad market. The company reported a net revenue decline of 13 percent in fourth quarter with business pacing down 20 percent in first quarter.

"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," said Jimmy Hayes, president and CEO for Cox Enterprises. "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 Radio's board of directors is expected to form a special committee of independent directors to assess the proposal with the assistance of outside financial and legal advisors.