Westwood One, Inc. (NYSE: WON) announced today that Los Angeles-based private equity firm, The Gores Group, LLC, will make an equity investment in Westwood valued at up to $100 million. Westwood One has a mere market cap now of $166 million.
Under the agreement, Gores will purchase $12.5 million of the radio and television programmer's common stock, and under Westwood One's discretion, up to a total of $100 million through specific preferred stock, warrant, and stock purchase agreements. The initial purchase by Gores will coincide with the closure of CBS Radio agreements. With the bulk of the investment not going into stock, it will also gain higher seniority if industry woes persist.
What is interesting is that this underscores at least some additional interest in a sector that has been under fire. Shares are up almost 7% in early market trading to $1.91. The 52-week range is $1.46 to $8.38, so at $1.90 you can see that the last year was a tough one. This was a $30 stock in 2004. It is hard to call stocks "value stocks" with declining revenues that have been seen to this effect, but maybe the worst part of the equation has finally been seen.
Private Equity buys into radio & TV via Westwood One investment
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