Sinclair Broadcast Group Inc. announced yesterday that it was making a public offering of 6 million of its common shares.
Baltimore-based Sinclair said the offering is intended to help it finance its recent acquisition of Sullivan Broadcast Holdings Inc. The Sullivan deal, which was announced Feb. 24, will cost Sinclair as much as $1 billion.
Sinclair expects that the offering will raise about $329 million and conclude within a month.
Kevin M. Kuzio, an analyst for KDP Investment Advisors Inc. in Montpelier, Vt., said the offering is a way for Sinclair to continue its strategy of using debt to acquire stations.
"They want to do debt-financed acquisitions in the future," he said. "Occasionally, they'll have capital offerings to balance things out. It reduces the risk of additional debt."
Sinclair also announced a concurrent offering of about 2 million shares by shareholders who got stock through the company's 1996 acquisition of River City Broadcasting LP. Sinclair said it will not receive any proceeds from this offering. The company declined to comment further on yesterday's announcement.
The Sullivan and River City deals are part of an aggressive acquisition campaign in which Sinclair has gained radio and television stations in medium-size cities nationwide.
Upon completion of its pending acquisitions, Sinclair will be the owner or programmer of 56 television stations in 37 markets and 51 radio stations in 12 markets. In Baltimore, Sinclair owns Fox affiliate WBFF and programs the WB Network's WNUV.
Kuzio said Sinclair's debt-heavy acquisition strategy is made a bit less chancy by the cash flow that new stations provide. "These are businesses that are spinning off a good bit of cash," he said. "It's not like it's 100 percent debt-financed."
Pub Date: 3/18/98