FOR IMMEDIATE RELEASE NEWS ANNOUNCEMENT
CONTACT:
D. Geoffrey Armstrong Keith A. Istre Joseph N. Jaffoni
Chief Financial Officer Chief Financial Officer Stewart A. Lewack
Chancellor Media Corporation Lamar Advertising Company Jaffoni & Collins
214/922-8700 225/926-1000 Incorporated
212/835-8500;
amfm@jcir.com
LAMAR ADVERTISING TO ACQUIRE CHANCELLOR MEDIA'S OUTDOOR
ADVERTISING ASSETS FOR $1.6 BILLION IN STOCK AND CASH
DALLAS, TX and BATON ROUGE, LA -- June 1, 1999 -- Chancellor Media
Corporation (Nasdaq: AMFM) and Lamar Advertising Company (Nasdaq: LAMR)
today announced that they have entered into a definitive agreement pursuant
to which Lamar will acquire Chancellor Media's outdoor advertising business
for approximately $1.6 billion in stock and cash. Pro forma for the
transaction, Lamar will operate approximately 118,500 outdoor advertising
displays in 39 states and will be ranked first in the U.S. in terms of
number of display faces.
Under the terms of the agreement, Lamar will pay $700 million in cash and
will issue approximately 26,227,000 of its Common Shares, valued at
approximately $900 million, to Chancellor for Chancellor's outdoor
advertising assets, primarily consisting of approximately 42,500 outdoor
display faces. The cash payment and quantity of shares to be issued by
Lamar are fixed and are not contingent upon the trading price of Lamar
shares. Chancellor intends to use the cash proceeds from the sale for debt
reduction.
After giving effect to the transaction Lamar will have approximately 88.2
million fully-diluted common shares outstanding of which Chancellor will
own approximately 30%. Chancellor will be required to hold the Lamar
shares for a minimum of one year. In addition, Chancellor will have the
right to nominate two members to the Lamar Board of Directors, increasing
the size of the Board to ten members.
Kevin P. Reilly Jr., Chairman of Lamar commented, "We are delighted to be
acquiring Chancellor's well-clustered portfolio of displays in major
metropolitan and regional markets including Chicago, Dallas, Orlando,
Indianapolis, Milwaukee, Las Vegas, Washington, D.C. and Providence. We
are also pleased to have Tom Hicks and Chancellor join us as prominent
shareholders in Lamar Advertising. The Lamar and Chancellor management
teams are recognized as innovators and leaders in the outdoor and radio
industries, respectively, and this agreement creates excellent
opportunities for each of us leverage our management talent to grow our
core businesses. Finally, with 42,500 new display faces we can deliver
more options and greater value to our advertising clients and new
opportunities for our employees and shareholders."
Thomas O. Hicks, Chairman of Chancellor Media, continued, "This transaction
provides us an opportunity to put our excellent outdoor advertising assets
into the hands of Kevin and Sean Reilly and Lamar's proven operating
management team. The agreement enables Chancellor's senior operating
management team to focus on our industry-leading radio station portfolio
and provides immediate benefits to the Company's balance sheet while
allowing us to participate in the growth and upside of the outdoor
advertising portfolio through significant equity ownership in Lamar."
James E. de Castro, Chief Executive Officer of Chancellor's AMFM Radio
Group added, "Since mid-March when operating managers were named to lead
the Company, we have focused on directing our assets and resources to those
areas where we can generate the greatest growth and value for our
shareholders. The agreement announced today represents our strong
confidence in the Lamar management team. By further reducing debt through
the sale of the outdoor assets, we are creating a more flexible financial
structure, positioning the Company to take advantage of growth
opportunities in our core radio operations."
The transaction is expected to be consummated late in the third quarter or
early in the fourth quarter of 1999 subject to Lamar's stockholder
approval, regulatory approval, including expiration of
the applicable Hart-Scott-Rodino waiting period, and other customary
closing conditions. The Reilly Family Limited Partnership has agreed to
vote its shares, representing approximately 80% of Lamar's voting power in
support of the transaction. Greenhill & Company and Morgan Stanley Dean
Witter & Co. served as advisors to Chancellor.
Chancellor Media Corporation (which is expected to change its name to AMFM
Inc. following a shareholder vote on July 13) is a diversified media
company consisting of AMFM Radio Group and the AMFM New Media Group, which
includes Katz Media, the leading media representation firm. Reflecting
announced transactions, AMFM Radio Group will be the nation's largest radio
broadcasting entity with approximately 465 stations in 105 markets reaching
a weekly listener base of 66 million people. AMFM's Katz Media is the only
full-service media representation firm in the United States serving
multiple types of electronic media. Chancellor Marketing Group is a full-
service, sales promotion firm developing integrated marketing programs for
Fortune 1000 companies. AMFM's Internet operations focus on developing
AMFM's E-commerce web sites, streaming online broadcasts of AMFM's on-air
programming and other media, and promoting emerging Internet and new media
concerns.
Lamar Advertising Company is a leading outdoor advertising company
currently operating 107 outdoor advertising companies in 36 states, logo
franchises in 19 states and the province of Ontario, Canada and 23 transit
advertising franchises in nine states.
This news announcement contains certain forward-looking statements that are
based upon current expectations and involve certain risks and uncertainties
within the meaning of the U.S. Private Securities Litigation Reform Act of
1995. Key risks are described in Chancellor's/AMFM's and Lamar's reports filed
with the U.S. Securities and Exchange Commission. Readers should note that
these statements may be impacted by several factors, including the ability to
conclude the transaction, economic changes and changes in the broadcasting and
outdoor advertising industries generally and, accordingly, the Companies actual
performance and results may vary from those stated herein and Chancellor/AMFM
nor Lamar undertake no obligation to update the information contained herein.