Under the terms of the agreement, Fisher shareholders will receive $41 in cash for each share of Fisher common stock they own. The transaction represents a 44% premium to the closing price of Fisher common stock on Jan. 9. Fisher owns 20 TV stations in eight markets, reaching 3.9% of U.S. TV households, and three radio stations in the Seattle market.
Official: Sinclair Buys Fisher For $373.3M
As first reported last evening by TVNewsCheck, Sinclair Broadcast Group and Fisher Communications Inc. announced today that they have entered into a definitive merger agreement whereby Sinclair will acquire Fisher in a merger transaction valued at approximately $373.3 million.
Under the terms of the agreement, Fisher shareholders will receive $41 in cash for each share of Fisher common stock they own. The transaction represents a 44% premium to the closing price of Fisher common stock on Jan. 9, 2013, the final trading day prior to Fisher announcing a review of strategic alternatives.
Fisher owns 20 television stations in eight markets, reaching 3.9% of U.S. TV households, and three radio stations in the Seattle market. Additionally, Fisher previously entered into an agreement to provide certain operating services for three TV stations, including two simulcasts, pending regulatory approval.
“We are excited to acquire Fisher and expand our coverage westward, especially in the two key markets of Seattle (DMA 12) and Portland (DMA 22),” commented David Smith, president-CEO of Sinclair. “Started in 1910, Fisher’s history of operating television and radio stations in the northwest corner of the U.S. has played an important role in its communities and in producing high-quality local news. We look forward to expanding upon those traditions and improving the cash flow of the stations through the benefits that come with our scale.”
Paul A. Bible, chairman of Fisher’s board of directors, said: “After conducting our review of potential strategic alternatives, the board concluded this all-cash transaction was the best path to maximizing value for shareholders.”
Colleen B. Brown, Fisher’s president-CEO, said: “Sinclair is the largest independent TV broadcaster in the country, and we believe its commitment to the industry — along with its greater scale and sizable resources — will provide our stations, team members and business partners with new opportunities to flourish.”
BRAND CONNECTIONS
This transaction is subject to approval by the FCC, antitrust clearance, the affirmative vote of two-thirds of Fisher’s outstanding shares and other customary conditions. The companies said the transaction is not conditioned on Sinclair obtaining financing or Fisher achieving or maintaining any financial or operational thresholds or metrics.
The transaction is expected to close and fund during the third quarter of 2013, subject to closing conditions. Fisher has no long-term debt and is expected to have approximately $20 million to $25 million of working capital at the time of the close.
Sinclair said it expects to finance the purchase price through cash on hand, a bank loan and/or by accessing the capital markets.
Moelis & Co. served as financial adviser and White & Case served as primary legal counsel for Fisher.
The Fisher television stations covered by the transaction are:
|
Station |
Affiliations |
Market |
DMA |
|||
|
KOMO |
ABC/This TV |
Seattle-Tacoma, WA |
12 |
|||
|
KUNS |
Univision/Mundo Fox |
Seattle-Tacoma, WA |
12 |
|||
|
KATU |
ABC/Me TV |
Portland, OR |
22 |
|||
|
KUNP |
Univision/Mundo Fox |
Portland, OR |
22 |
|||
|
KLEW |
CBS |
Spokane, WA |
73 |
|||
|
KBOI |
CBS/CW |
Boise, ID |
111 |
|||
|
KYUU |
CW |
Boise, ID |
111 |
|||
|
KVAL |
CBS/This TV |
Eugene, OR |
121 |
|||
|
KCBY |
CBS |
Eugene, OR |
121 |
|||
|
KPIC |
CBS |
Eugene, OR |
121 |
|||
|
KMTR3 |
NBC/CW |
Eugene, OR |
121 |
|||
|
KMCB3 |
NBC |
Eugene, OR |
121 |
|||
|
KTCW3 |
NBC |
Eugene, OR |
121 |
|||
|
KIMA |
CBS/CW |
Yakima-Pasco-Richland-Kennewick, WA |
123 |
|||
|
KEPR |
CBS/CW |
Yakima-Pasco-Richland-Kennewick, WA |
123 |
|||
|
KUNW |
Univision |
Yakima-Pasco-Richland-Kennewick, WA |
123 |
|||
|
KVVK |
Univision |
Yakima-Pasco-Richland-Kennewick, WA |
123 |
|||
|
KORX |
Univision |
Yakima-Pasco-Richland-Kennewick, WA |
123 |
|||
|
KBAK |
CBS |
Bakersfield, CA |
126 |
|||
|
KBFX |
FOX/This TV |
Bakersfield, CA |
126 |
|||
|
KIDK |
CBS/FOX |
Idaho Falls-Pocatello, ID |
160 |
|||
|
KXPI |
FOX |
Idaho Falls-Pocatello, ID |
160 |
|||
|
The Fisher radio stations covered by the transaction are: |
|
|||||
|
KOMO |
1000 AM (news) |
Seattle-Tacoma, WA |
13 |
|||
|
KOMO |
97.7 FM (news) |
Seattle-Tacoma, WA |
13 |
|||
|
KPLZ |
101.5 FM (contemporary) |
Seattle-Tacoma, WA |
13 |
|||
|
KVI |
|
570 AM (talk) |
|
Seattle-Tacoma, WA |
|
13 |
Comments (14)
kendra campbell says:
April 11, 2013 at 9:42 am
There goes the neighborhood.
Jim Burnay says:
April 11, 2013 at 5:30 pm
Soon the entire free world will be working for Sinclair and viewers and an occasional listener will be getting all their news from them too. How exciting!!
Paul Hoagland says:
April 11, 2013 at 10:27 am
I repeat:
I’m sure I will be considered close to extinction for this but doesn’t SBG, at some point need to demonstrate that they can actually run all the stations they have purchased in the past 12 months effectively. Maybe create some value with the asset as a business beyond merely buying something and creating fees for the M&A bankers and lawyers. Anyone can buy and continue to buy as long as Wall St continues to fund and why wouldn’t they since the retransmission revenues are facilitating these purchases thru Sinclair’s ability to immediately take any purchased station to their previously negotiated rates with the major MPVD’s. Maybe the DOJ should look a little closer at this. But this isn’t building or even allowing for a “local business” which is (imo) what trelevision stations ought to be. Chesapeake is headed by someone who’s track record is a little light on actually operating a television station in the classic sense, however ‘olde fashioned’ a concept that may be(see CCA). Again,despite not having all the information of an insider it would seem to me that most of those CCA stations, while pulled out of bankruptcy, are pretty weak and their new owner will need to inject significant resources to make them real, viable television properties capable of producing something worthwhile beyond retrans $. This isn’t exactly like a Raycom or Cox buying a station and actually improving it. I’m not taking a potshot at the SBG people as operators but haven’t we seen this story before in the radio business and that hasn’t seemed to turn out to well, though I’m certain the bankers and brokers will vehemently disagree with me.
Albert Pica says:
April 11, 2013 at 2:33 pm
Valid point.
Ellen Samrock says:
April 11, 2013 at 11:42 am
Sinclair is firmly committed to the future of broadcast television. For that reason alone I applaud their latest transaction.
Roger Lyons says:
April 11, 2013 at 12:19 pm
Clear Channel said the same thing about the future of broadcast radio when they bought AMFM. History is about to repeat itself.
Ellen Samrock says:
April 11, 2013 at 12:58 pm
It’s better to see Sinclair’s latest acquisitions remain as television stations, even with shared facilities and a few layoffs, then to see them become reverse auction road kill to the wireless companies and have them go dark. Sinclair is the only station group, so far, that has taken the bold step of experimenting with OFDM and convincing the FCC to let them do it. This tells me they believe in the future of broadcasting and plan to remain as broadcasters for a long time. For that alone they have my full support.
shad test says:
April 11, 2013 at 11:59 am
I am not sure what to think of this new development.
Mark Annas says:
April 11, 2013 at 2:47 pm
We are now seeing a total lack of responsibility in broadcasting: According to a March 12 regulatory filing, Sinclair Broadcast Group had $2.27 billion in debt (as of Dec. 31) and is seeking nearly $1 billion in loans to refinance existing debt and support the recent acquisitions of Barrington Broadcasting Group and certain Cox Media Group stations. According to Bloomberg, the company is also selling $600 million of bonds to pay down existing debt. In the past two years, Sinclair has spent roughly $1.5 billion… buying Freedom on credit for $385 million, Four Points for $200 million, Newport for $467 million, and, most recently, Barrington for $370 million and four Cox stations for $99 million. It has also been reported that Sinclair is trying to buy Titan Television Broadcast Group and its 12 mid-to-small-market stations. Translation: Sinclair continues to buy television stations with money it doesn’t have. How much cash will Sinclair have to operate and improve these stations they are gobbling up? How does this help preserve the voice of local braodcast??????? It doesn’t.
Manuel Morales says:
April 11, 2013 at 3:27 pm
Sinclair never has been considered a company that doesn’t invest in their properties. Contrary to popular myth they are good broadcasters. Furthermore leveraging like Sinclair is doing is how broadcast deals get done. It’s been that way for 30+ years. High cash flow business.
Brad Dann says:
April 11, 2013 at 4:01 pm
“Sinclair continures to buy stations with money it doesn’t have”. You need to get a quick lesson in finanincing and how markets work. All companies borrow money to make aquisitions except for maybe Warren Buffett. And most of the companies they have bought recently: Freedom (out of bankruptcy); CCA (bad perfromer, but little resource); Barrington (lousy operator) and Fisher (again lusy operator, just do a search on them on this site) aren’t exactly stellar operators in any sense of the word. I don’t agree with a lot of SBG’s philosphies, but this is how a FREE market works, they are willing to pay more than others will and they are able to get investors to give them the money to do so. The only people at risk are those investors and redundant positions to what Sinclair has or feels is necessary
Ellen Samrock says:
April 11, 2013 at 6:25 pm
And let’s put this in perspective. When Clear Channel was sold, the two leveraged buyout firms who bought it paid nearly 18 billion dollars (that’s billion with a B). And what did they get? 900 radio stations and an outdoor ad division–properties that were vastly overrated. Those firms are in so deep they’ll never get out. So Sinclair spending 3 billion or so for stations that are probably priced right is modest by comparison. I think they will have little problem servicing that debt. I also happen to believe that broadcast television, as it will become, has a much brighter future than radio.
Andrea Rader says:
April 11, 2013 at 5:41 pm
A pretty big bet on Sinclair’s part in an industry where the certainties are less certain than ever. If the government cracks down on retransmission consent or virtual duopolies, or if networks like FOX pull the rug out from under the affiliate base by going cable-only, how can Sinclair service all this debt?
Kristjan Magnusson says:
April 11, 2013 at 10:32 pm
More stations = more leverage in retrans negotiaions. More leverage = more cash. David Smith knows that with the size of his group he will be able to push for higher fees. It’s all about the cash. Nothing more, nothing less.