Raycom likely buyer of Lincoln TV assets -sources
By Megan Davies and Michael Flaherty
NEW YORK, Oct 25 (Reuters) - Privately held Raycom Media appears close to buying the television assets of insurance and investment firm Lincoln National Corp. (LNC.N), two sources familiar with the situation told Reuters.
Philadelphia-based Lincoln said in June it would explore strategic options for its Lincoln Financial Media unit, which owns and operates three television stations in the U.S. Southeast including North Carolina, 18 radio stations and a sports syndication and production business.
The unit as a whole is valued at around $1.2 billion, one of the sources estimated, broken down to around $650 million for radio, $500 million for TV and $50 million for the syndication.
Sources said Raycom was willing to pay around 13 to 14 times cash flow for the assets, higher than broadcast peers which one analyst said trade at around 10 to 13 times.
Private equity firm Oak Hill Partners was involved in the auction, but was not willing to pay the price Raycom appears willing to pay, sources said. Oak Hill bought the New York Times' (NYT.N) broadcast unit in May for $3.3 billion.
It was uncertain whether Raycom's pending deal included the sports business, a TV production company involved in the broadcast of college football and basketball throughout the U.S. Southeast.
In addition, the sale of Lincoln's radio assets was unclear, as parties were only interested in buying separate stations rather than the asset as a whole, and bids were thought to be at a disappointing price, one of the sources said.
But Raycom is in pursuit of the Lincoln T.V. group, sources say. Montgomery, Alabama-based Raycom, which owns or operates 42 television stations in 18 states, did not return numerous calls made over a period of three days to various executives.
As in any auction, Raycom may decide to bow out, another bidder could appear, or the seller could decide to put the process on hold. Sources said that a Raycom deal was not finalized.
Regardless of whether Raycom gets the businesses, the deal demonstrates how strategic buyers -- corporate bidders from the same industry -- have emerged from the credit crunch with greater buying power than private equity firms.
The crunch reduced the amount of borrowing available to buyout firms, causing them to pull back from auctions after two years of being able to outbid strategic buyers.
A deal for Lincoln's assets could reinvigorate the mergers and acquisitions (M&A) market for other broadcast assets.
Television broadcaster Nexstar Broadcasting Group Inc. (NXST.O) in August suspended talks with prospective buyers while LIN TV Corp. (TVL.N), which said in May it was exploring a possible sale, has not announced any deal.
Parties interested in buying individual radio assets from Lincoln were thought to include radio operator Entercom Communications Corp. (ETM.N), Cumulus Media Partners, a radio operator backed by buyout firm Blackstone Group (BX.N) and Cumulus Media Inc. (CMLS.O); and TV broadcaster Bonneville International Corp., one of the sources said.
The radio division may be sold in parts, that source said.
A spokeswoman for Lincoln said on Tuesday she could not comment on "rumors or speculation."
Bonneville, Cumulus and Entercom did not comment. Oak Hill declined comment.
(Additional reporting by Tim Mclaughlin; editing by Phil Berlowitz)
