Kick-starting a dormant media IPO market, Las Vegas-based Citadel Broadcasting announced plans Thursday to raise up to $300 million in an offering to expand its radio holdings.
The U.S.’ sixth largest U.S. radio station group will offer 17 million shares, initially priced at $18 each. No date has been set for the listing, but Citadel is clearly trying to exploit the high trading multiples of TV and radio station groups as the FCC mulls relaxing ownership rules. Investors are optimistic about Citadel’s chances, despite the recent slowdown in radio advertising spending.
Citadel owns and operates 143 FM and 63 AM radio stations in 42 markets in 24 states. Company generated broadcast revenues of around $349 million last year.
In its SEC prospectus filing, the company said it wants to build radio station clusters in existing and new markets. It may have its eye on rival radio group Cumulus, with which it already has some overlapping assets, as a possible acquisition target.
Ten-year-old Citadel, which was acquired by LBO firm Forstmann Little & Co. in 2001 for $2 billion, is headed by respected broadcast veteran Farid Suleman, formerly CEO of Viacom-owned Infinity Broadcasting and a long time ally of Viacom chief operating officer Mel Karmazin.
In the last year, Citadel has invested in new programming and sales operations while reducing costs in anticipation of strategic acquisitions.