Regent puts its quill to a deal for Brill

The radio stations of bankrupt Brill Media Company are no longer in play. The auction is closed, and the winning bidder is Regent Communications (O:RGCI). It is putting up $62M for 12 stations in four or six markets, depending on ones point of view.

At least half of the value will be paid in cash. The rest will potentially be paid in Regent common stock, although if the price per share dips below $7.50, Regent has the option of paying all or part of the remaining $31M in cash as well.

All of the stations are in new territory for Regent. When the deal closes, the group will have 73 stations in 17 markets.

"This acquisition matches our acquisition criteria," said Regent Chairman/CEO Terry Jacobs. "Located in five very attractive markets [the editor notes that Jacobs took the safe route and split the difference in his characterization of the number of markets in this deal], these stations have leadership positions, strong technical facilities and the ability to generate an internal rate of return in excess of 25% over the next five years. We are also thrilled with the option to finance a portion of this transaction with our stock, on terms that provide anti-dilution protection to our shareholders."

The deal is contingent on approval by the bankruptcy court - - which is expected to be granted in hearing today - - along with the standard stamp of approval from the FCC.

Regent teamed up with 21st Century Publishing to bid $108M for all of Brill Media, with 21st Century taking the collection of mostly weekly newspapers in Michigan.

Alan Brill told RBR that he and Cumulus Media (O:CMLS) ended their bidding at $105M. Saga Communications (A:SGA) had also bid on the radio group, but didn't stay in for the final round of bidding.

Although Alan Brill won't get a penny from the bankruptcy court sale, he still controls four radio stations - - WVJS-AM & WSTO-FM Evansville, IN-Owensboro, KY, WSOX-FM Lancaster, PA and KKAW-FM Albin, WY. He also owns some local telephone directories in Michigan. Brill had agreed to sell WSTO to South Central Communications if the bankruptcy auction didn't go his way, which it didn't. There's no word yet on what will happen to the other three stations.

Brill pegged the cash flow multiple for the auction price at 15, but he questioned how Regent could justify the price with two key stations due to exit their clusters - - WSTO and WSOX.

RBR Observation:

Our somewhat odd comment that the stations Regent is buying are in four or six markets is explained by the fact that some of them straddle the line between two nearby Arbitron markets. The group being acquired includes WIOV-AM & FM in Lancaster PA/Reading PA (there are two of the markets); WBKR-FM, WKDQ-FM and WOMI-AM in Evansville IN/Owensboro KY (there are two more); KTRR-FM, KUAD-FM and an FM CP in the Fort Collins CO market; and KKCB-FM, KLDI-FM, KBMX-FM and WEBC-AM in Duluth MN.