Radio Stocks Jump on Bid to take Emmis Private

Tribune Co. shares climb on circulation data at flagship newspaper

By David B. Wilkerson, MarketWatch
Last Update: 2:09 PM ET May 8, 2006

CHICAGO (MarketWatch) - Radio broadcasting group stocks were up sharply Monday after Emmis Communications Chairman Jeff Smulyan made a $567 million bid to take that company private, and Entercom Communications said its board had agreed to boost its stock buyback.

Emmis (EMMS) was up nearly 23% at $16.46. Smulyan's offer price for Emmis (EMMS) represents a nearly 14% premium over the stock's Friday closing price of $13.43. The proposal values the company's Class A and Class B common shares at $567 million and implies an enterprise value of about $1.4 billion, based on Emmis' outstanding debt and preferred stock.

Entercom (ETM) was up 6.6% at $29.45. The company said its board has green lighted an additional buyback of $100 million. The repurchases will be made over the next year depending on market conditions and other factors.

The company also reported first-quarter results, saying that excluding items, it earned 18 cents a share on revenue of $91.1 million, topping the average estimates of a 14-cent profit and $90.5 million in revenue forecast by analysts who responded to a survey by Thomson First Call.
Entercom said it anticipates a decline in net revenue of a mid-single digit percentage on a same station basis for the second quarter.

Among other radio gainers, Clear Channel Communications (CCU) rose 3.1% to $30.39; Cox Radio (CXR) added 4% to $15.64; Radio One (ROIAK) rose 6.2% to $8.39; and Westwood One (WON) picked up 4.2% to $9.24.

In the newspaper publishing group, Tribune Co. (TRB) was up $1.59, or 6%, to 29.60 after the company said its flagship Chicago Tribune saw individually paid Monday-Friday circulation grow 2.1% in the six-month period ended March 31, compared with the same period a year earlier, according to data compiled by the Audit Bureau of Circulations. Home delivery on weekdays during the period was up 3.3%.

Total average paid circulation Monday-Friday was up 0.9%

On Sunday, individually paid circulation grew 0.4%, with home delivery up 2%.
The newspaper said the increase in circulation stems from "editorial innovations, as well as increased investment in sales and marketing and product enhancements."

The Chicago Tribune said its Subscriber Advantage program, which offers members exclusive access to content on Chicagotribune.com, special discounts from advertisers and other benefits, helped it sign up more customers, along with a greater number of color pages, and expanded entertainment coverage.

Tribune Co.'s news came on the same day that the Newspaper Association of America, citing ABC data, reported that average daily circulation for all newspapers in the same six month period declined by 2.6%, and dropped 3.1% on Sunday.

Improved circulation at a big metropolitan daily could bode well for owners of other such newspapers, who have generally reported more robust advertising growth at their smaller-and-mid-sized papers.

Among other newspaper stocks, Gannett (GCI) rose 3.3% to $57.09; New York Times (NYT) headed nearly 5% higher to $25.73; and McClatchy Co. (MNI) rose 2% to $46.57.