In order to obtain regulatory approval for its planned $1.7 billion acquisition of CBS Radio, Entercom Communications Corp. has agreed to divest 16 radio stations in four different cities in order to ensure regulatory approval, writes Jeff Blumenthal for the Philadelphia Business Journal.
Bala Cynwyd, Pa.-based Entercom acknowledged in a Tuesday SEC filing that it had offered to divest certain stations to comply with antitrust rules regarding anti-competitiveness in specific markets.
The divestitures were necessary because Entercom would have owned stations in seven markets in excess of the limits set forth in the FCC’s local radio ownership rule.
According to a memo from CBS Radio CEO Andre Fernandez to employees obtained by RadioInsight.com, the affected stations include 11 from CBS and five from Entercom in Boston, San Francisco, Sacramento and Seattle.
Entercom released a brief statement.
“The amended FCC filings marks another step forward in the process to complete our combination with CBS Radio and we remain on track to close the transaction later this year,” the company said. “Given the ongoing regulatory review, we are unable to comment further at this time.”
The station buyers have not been announced.
“Entercom has reached preliminary, non-binding agreements with other third parties who will either acquire or operate stations in the remaining four markets,” Entercom said in its SEC filing.
“To the extent that any radio stations required to be divested are not divested to third parties as of the closing of the merger, the stations will be transferred to a divestiture trust, and CBS and Entercom have proposed measures to ensure that these stations will be held separately until they are divested to third parties following the closing of the merger.”
Entercom hopes to close the deal, announced Feb. 2, by the end of the year.
In the SEC filing, Entercom said that including the $57.75 million it will receive from EMF, it will net $265 million cash and 11 stations in three markets from the divestitures.
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