Sinclair calls off stock offering 'Market conditions' cited as reason


November 02, 1996|By FROM STAFF REPORTS

Sinclair Broadcast Group Inc. said yesterday that it was canceling a planned offering of 6.25 million shares of common stock due to "market conditions," but that it intends to reconsider when market conditions are more favorable.

Baltimore-based Sinclair's shares closed yesterday at $31.75, up but they had been trading as high as $43.75 on Oct. 18. They tumbled by $9 a share Oct. 21, when Sinclair said third-quarter earnings would fall short of analysts' expectations, and yesterday the company blamed what it has called a Wall Street overreaction for the canceled offering.

"Market conditions are such that we believe at the stock's current level the market is not accurately reflecting the company's true value," David Smith, Sinclair's president and CEO, said in a statement.

Sinclair said it may even buy back shares on the open market, rather than sell more. Buybacks are a move to bolster the stock's price, and companies usually conduct them only when they think their shares are undervalued.

Also yesterday, Sinclair reported a loss of $3.3 million, or 10 cents a share, for its third quarter, compared with a loss of $4.9 million, or 14 cents a share, for 1995's third quarter.

Sinclair said its third-quarter pro-forma broadcast cash flow fell 4.3 percent because of higher programming expenses and weak TV advertising revenue. Cash flow is the most closely watched financial measure for broadcasting companies.

The company on Oct. 18 warned that its cash flow would fall 4 percent to 5 percent.

Total broadcast revenues were $110.3 million in the quarter, up 119.8 percent from 1995's $50.2 million. Much of that gain was due to an acquisition.

Sinclair owns or controls 28 television stations -- including Channels 45 and 54 in Baltimore -- and 33 U.S. radio stations.

Pub Date: 11/02/96

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