NEW YORK — Dallas investment firm Hicks, Muse Tate & Furst is set to announce the $2 billion acquisition of radio company SFX Broadcasting this week, according to weekend newspaper reports, in a deal that would effectively make Hicks Muse the biggest radio broadcaster in the country.
Hicks Muse, which last week agreed to pay $1.7 billion for Lin Television, will pay $1.1 billion in cash for SFX and assume the company’s $920 million debt, according to a report in the Dallas Morning News that was quoted by Reuters.
Details of the deal could not be confirmed Sunday, although people close to SFX said a deal was close. Hicks Muse chairman Tom Hicks was in his Dallas office Sunday afternoon but was not available for comment, and SFX’s office was closed.
Wall Streeters said expectations about an acquisition of SFX have been rising for the past few months, as SFX’s controlling shareholder Bob Sillerman is not seen as a lifelong radio operator and was expected to take advantage of the wave of consolidation sweeping the industry.
More than doubled
SFX stock has more than doubled over the summer in anticipation of a deal. It closed up $1.87 Friday to $67.87, compared with its level of $30 just last May.
New York-based SFX, which owns 71 radio stations, would join a growing array of radio properties controlled by Hicks Muse. The firm now controls Chancellor Broadcasting, which is shortly due to merge with Evergreen Media to become the No. 2 radio broadcaster behind CBS, as well as Capstar Broadcasting.
Where SFX would fit into Hicks Muse’s portfolio is not clear, although Evergreen is not thought to be involved in the deal, suggesting SFX won’t be merged into Chancellor. Evergreen CEO Scott Ginsburg was quoted late last month saying his company was not interested in pursuing SFX, an Evergreen spokesman said Sunday. Hicks Muse will have 16% of the combined Chancellor-Evergreen, which will have about $800 million in radio revenues compared with CBS’ $1 billion.
Hicks Muse, which oversees investment funds raised from a variety of investors, has made expansion in broadcasting a top priority. It said after announcing the Lin deal last week it planned to use Lin as the platform for growing in television.
Consolidation in both TV and radio has been prompted by relaxation of ownership limits. Radio regulations have been eased the most.