Citadel-Disney Radio Purchase Official

Citadel will get most of Disney’s radio assets in a $2.7 billion purchase that will create the third-largest radio group, according to participants. The cash and stock transaction has been rumored for weeks, and the Wall Street Journal reported Monday morning that details were worked out over the weekend.
The Disney assets involved had 2005 revenue of approximately $575 million and operating income of approximately $200 million.
Disney shareholders will hold 52% of the new company and Disney will retain $1.4 billion to $1.65 billion in cash depending on the market price of Citadel Broadcasting when the deal closes. Citadel shareholders will own the remaining 48% of the combined company.
The agreement would combine ABC Radio, which includes 22 radio stations and the ABC Radio Networks, with Citadel Broadcasting. Citadel CEO Farid Suleman, a former CEO of Infinity, will be CEO of the entity. The management team will remain based in Las Vegas.
Participants expect the deal to close by the end of the year.