Radio One to Sell Station; Approves Stock Buyback
Radio One Inc. (ROIAK), the owner of stations serving black audiences, agreed to sell Los Angeles radio station KRBV-FM to Bonneville International Corp. for $137.5 million. The shares surged 61 percent, the most ever.
Radio One's board also approved a $150 million stock repurchase program, the Lanham, Maryland-based company said today in a statement.
Radio One's stock is down 24 percent this year, including today's advance. The company has been hurt by the migration of advertising from radio to the Internet and cable television. Last month it reported a fourth-quarter loss of $386.4 million, including costs to write down the value of assets, and a 5.1 percent drop in revenue to $78.1 million.
``The sale of the L.A. station causes a huge sigh of relief for shareholders because they have been calling for this,'' Fred Moran, an analyst at Stanford Group in Boca Raton, Florida, said in an interview. ``L.A. had been a thorn in Radio One's side for the last several years.''
The station, which plays urban music, has been losing money, said Moran, who recommends holding Radio One shares and doesn't own any.
Radio One jumped 67 cents to $1.77 at 3:59 p.m. in Nasdaq Stock Market trading. The company first sold shares to the public on May 5, 1999.
Proceeds from the station sale will be used to reduce debt, buy back stock and speed up Internet strategies, the company said.
Bonneville is a closely held radio company based in Salt Lake City. Excluding the purchase of KRBV, the company owns and operates 30 radio and five television stations. Rothschild Inc. advised Radio One on the transaction. Radio One owns or operates 53 stations.
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