CBS CBS Corp

By Anne Steele 

Entercom Communications Corp. reached a deal to buy CBS Corp.'s flagging radio unit, a business the media giant has been looking to shed for almost a year.

The tax-free merger will form a company with a nationwide footprint of 244 stations, including 23 of the top 25 U.S. markets, and a growing events platform. Entercom Chief Executive David Field will lead the combined company. Andre Fernandez will continue as CEO of CBS Radio through the deal's closing.

The company will be merged through a so-called reverse Morris trust, which combines a tax-free spinoff with a prearranged merger. CBS shareholders will have the opportunity to exchange all, some, or none of their stock for CBS Radio shares. CBS Radio will then merge with an Entercom subsidiary, and the new CBS Radio shareholders will receive Entercom shares in exchange for their CBS Radio shares.

In all, CBS Radio shareholders will hold about 105 million Entercom shares, or 72% of the combined company. Existing Entercom shareholders will own the remaining 28%.

The deal is subject to Entercom shareholder approval. Joseph Field, Entercom chairman and a controlling shareholder, has agreed to vote in favor of the transaction.

The tie-up is expected to close during the second half of the year.

For several years, radio has been seen as a drag on CBS's results. Last March, CBS CEO Leslie Moonves said the company was considering strategic options for the radio unit, comprised of 117 stations mostly located in the nation's biggest markets.

Write to Anne Steele at Anne.Steele@wsj.com

(END) Dow Jones Newswires

February 02, 2017 09:05 ET (14:05 GMT)

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