NEW YORK — Granite Broadcasting Corp. plans to raise $150 million in preferred stock in a private offer-ing to help finance its acquisition of WXON, the WB affiliate in Detroit, the company said Tuesday.
Granite agreed to acquire WXON for $175 million in cash in early December, although the deal has yet to close. It said Tuesday it had a $200 million credit facility it can use to finance the deal, but it plans to use only $30 million-40 million of the facility to fund the purchase.
Granite chairman Don Cornwell said the decision to raise the equity capital as exchangeable preferred stock, rather than common stock, reflected the recent slump in broadcasting stock prices. Granite’s stock has dropped from just under $15 last fall to Tuesday’s close of $11.
“If we had a slightly higher valuation, we probably would have gone into the market and maybe used our bank facility plus some pure equity to finance this,” Cornwell said.