Nexstar and three entites backed by private-equity funds are vying for the 42 stations in 24 markets, sources say. Equity bidders are Kelso, Oak Hill/Diamond Castle and Providence, each in partnership with established broadcast manager.
With the bidding past the $1 billion mark, four companies are vying for Clear Channel Television, the division of Clear Channel Communications that operates 42 TV stations in 24 small- and mid-sized markets, and a winner could be named with the next two weeks, according to industry sources.
The four bidders include Nexstar Broadcasting Group, a publicly traded broadcast group headed by Perry Sook, along with three entities backed by private equity firms that have been active in the station trading marketplace over the past year.
The private equity bidders:
- Kelso & Co., which is fronted by veteran broadcasters Bert Ellis. Last year, the Kelso-Ellis tandem bought KDOC, an independent station in Los Angeles for $150 million.
- Oak Hill Capital Partners in a joint bid with Diamond Castle. Oak Hill and broadcaster Randy Michaels are buying the New York Times TV group for $575 million. Diamond is backing broadcaster Randy Bongarten in acquiring BlueStone Television for $230 million.
- Providence Equity Partners along with broadcaster Sandy DiPasquale. They currently operate the BlueStone group, but are selling it to Bongarten and Diamond Castle as noted above.
The next round of bids is due next Wednesday, and parent Clear Channel Communications is expected to pick a winner within a week of those bids, one source close to the dealmaking said.
The same source said the price tag is currently around $1.1 billion and that all the bidders are within $75 million of each others.
Representatives of the bidders declined to comment on the record.
Assuming Clear Channel TV has annual revenue of about $350 million and a cash-flow multiple of 30 percent, $1.1 billion would represent a price with a cash-flow multiple of just over10.
According to the BIA Financial Network, the group ranks 18th among TV station groups in annual revenue and 17th in audience reach. Its stations cover about 12.5% of all TV homes in the nation.
The group operates stations in markets ranging from San Francisco (DMA 6) to Fairbanks, Alaska. (DMA 203), but the San Francisco is an independent station on the fringe of the market. It’s most important station is WKRC, the CBS affiliate in Cincinnati.
Clear Channel Communications announced its decision to sell its TV group and 448 of its 1,150 radio stations last November at the same time it agreed to a takeover by private equity groups led by Thomas H. Lee Partners and Bain Capital Partners for $18.7 billion and the assumption of $8 billion in liabilities.
A shareholder vote on the takeover has been scheduled for April 19, the day after the final TV bids are due.
One source said that the parent company intends to proceed with the sale of the TV division, regardless of what happen with the takeover.