CBS Radio Files Initial Public Offering

CBS Radio Inc., a division of CBS Corp., filed for an initial public offering as one of the nation’s oldest broadcasters prepares to leave the shrinking AM/FM radio business.

Andre Fernandez

According to Bloomberg, the company filed for an initial offering of $100 million, a placeholder amount that’s used to calculate fees and will probably change. CBS Radio plans to take on debt before the stock sale to give to its parent , the Friday filing shows, as well as distribute some of the IPO proceeds to CBS. The rest will fund general corporate purposes and cash needs. CBS Radio didn’t name any underwriters in the filing.

A buyer could emerge before a stock offering is completed. CBS said in March it was considering putting a for-sale sign on the business and was weighing multiple options. Andre Fernandez, president of CBS Radio, told employees in a memo Friday the company is still considering possible courses.

“An initial public offering of CBS Radio stock has been and continues to be our primary focus as a step towards separating CBS Radio from CBS Corp.,” Fernandez wrote. “That said, we are continuing to consider other paths to find what we believe will be the best option for unlocking the value of our radio assets for CBS shareholders.”

CBS Corp. owns radio stations dating back to the inception of Columbia Broadcasting System in 1927. While the most-watched TV network has been exploring strategic options for the division, including a sale, analysts anticipated the company would spin off the business as it did with outdoor advertising.

By spinning off radio, CBS is reducing its dependence on advertising sales. CBS has said it will increase sales by extracting retransmission fees from pay-TV operators and selling video services over the Internet.

CBS Radio posted a net loss of $136.5 million on revenue of $1.2 billion last year, after writing down the value of licenses. Both metrics declined from 2014, when revenue was $1.3 billion and the company saw net income of $176.5 million. Overall radio advertising sales declined 1 percent to $17.4 billion last year even as digital radio sales grew 5 percent, according to the Radio Advertising Bureau.

CBS Radio, which may be worth about $2.9 billion according to Bloomberg Intelligence estimates, operates 117 radio stations in 26 U.S. markets.