Wednesday, November 30, 2005

Wed - Walt Disney narrows bidders for ABC Radio

Walt Disney, has narrowed the field of bidders for its ABC Radio division. The move that should pave the way for a sale of the unit before the end of the year. Analysts have estimated the unit could be valued at between $2bn and $3bn.

There are apparently only three bidders left. They include Entercom Communications of Pennsylvania, Cumulus Radio of Georgia – which recently acquired a large portfolio of radio assets from Susquehanna Pfaltzgraff, a Pennsylvania-based conglomerate – and Kohlberg Kravis Roberts, the US private equity group that unexpectedly emerged as a player in the race in recent days.

Disney’s radio group includes 72 stations, with 44 in the top 25 markets. In 2004, Disney group reported an estimated $710m in revenue.

The company decided to consider a sale following the appointment of Bob Iger as the new chief executive, which prompted a review of all the media group’s assets – which include theme parks, animated film production, film studios and the ABC television group.

A sale of its radio unit would represent another step in the reshaping of the global media industry, which is haveing to cope with depressed stock prices and increased competition from telecommunications providers and technology providers. Media Conglomerates are getting the worse of it and breaking up seems the shortest route to boosting share prices. Time Warner should pay heed.

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