Combination of CBS Radio and Entercom Will Create Scale and Reach across the U.S., Including 22 of the Top 25 Markets
New York, NY-CBS Corporation (NYSE: CBS.A and CBS) ( CBS ) today announced the commencement of an exchange offer for the separation of its radio business as part of its previously announced agreement to combine CBS Radio Inc. ( CBS Radio ) with Entercom Communications Corp. (NYSE: ETM) ( Entercom ). The combined company will have a nationwide footprint of 235 stations, including stations in 22 of the top 25 U.S. markets.
The exchange offer represents the next step in the planned combination of CBS Radio and Entercom, which will be effected through a Reverse Morris Trust transaction. In the exchange offer, CBS shareholders will have the opportunity to exchange their shares of CBS Class B common stock for shares of CBS Radio common stock, which will be immediately converted into the right to receive an equal number of shares of Entercom Class A common stock upon completion of the proposed merger, in each case subject to certain customary terms and conditions. The exchange offer and merger are generally expected to be tax-free to participating CBS shareholders for U.S. federal income tax purposes.
We are very pleased to be taking this important step toward the split-off of our radio business in a way that we believe is good for CBS Radio, good for the CBS Corporation, and good for our shareholders, said Leslie Moonves, Chairman and Chief Executive Officer, CBS Corporation. This exchange offer will give equity holders the opportunity to invest in what we believe will be a best-in-class radio company, with top assets and a terrific management team. And for CBS, we expect that it will unlock even more value and allow us to become even more focused on the creation and distribution of premium video content.
Details of the Exchange Offer:
Holders of CBS Class B common stock will have the opportunity to exchange some or all of their shares for CBS Radio common stock at a 7% discount per-share value, subject to an upper limit (as described below).
The discount means that tendering shareholders are expected to receive approximately $1.08 of CBS Radio common stock for every $1.00 of CBS Class B common stock tendered and accepted in the exchange offer.
The number of shares a CBS shareholder can receive in the exchange offer is subject to an upper limit of 5.7466 shares of CBS Radio common stock for each share of CBS Class B common stock tendered and accepted in the exchange offer.
If the upper limit is in effect, then the exchange ratio will be fixed at that limit and tendering shareholders will receive less than $1.08 of CBS Radio stock for each $1.00 of CBS Class B common stock.
CBS will offer 101,407,494 shares of CBS Radio common stock in the exchange offer. The number of shares of CBS Class B common stock that will be accepted in the exchange offer will depend on the final exchange ratio, the number of shares of CBS Class B common stock tendered, and whether the upper limit is in effect.
CBS Radio common stock will not be transferred to participating shareholders following the exchange offer. Such participants will instead receive shares of Entercom Class A common stock in the merger immediately following the completion of the exchange offer. No trading market currently exists or will exist for shares of CBS Radio common stock.
The exchange offer is scheduled to expire at 11:59 p.m., New York City time, on November 16, 2017, unless the exchange offer is extended or terminated.
Subject to the upper limit, the final exchange ratio used to determine the number of shares of CBS Radio common stock that participating shareholders will receive for each share of CBS Class B common stock accepted in the exchange offer will be based on the simple arithmetic average of the daily volume-weighted average prices of shares of CBS Class B common stock and Entercom Class A common stock on the New York Stock Exchange on each of three valuation dates, the three consecutive trading days ending on and including the second trading day preceding the expiration date of the exchange offer period, which are currently expected to be November 10, 13, and 14, 2017 (the Valuation Dates ). Unless the exchange offer is extended or terminated, the final exchange ratio will be announced in a press release no later than 11:59 p.m., New York City time, on November 14, 2017, and the exchange offer will expire at 11:59 p.m., New York City time, on November 16, 2017, leaving two trading days between the date that the final exchange ratio is announced and the expiration of the exchange offer. The final exchange ratio, as well as a daily indicative exchange ratio beginning at the end of the third day of the exchange offer period, will also be available at www.cbscorpexchange.com.
Immediately following the completion of the exchange offer, a special-purpose merger subsidiary of Entercom will be merged with and into CBS Radio, with CBS Radio surviving the merger and becoming a wholly owned subsidiary of Entercom. In the merger, each share of CBS Radio common stock will be converted into the right to receive one share of Entercom Class A common stock. Entercom will issue 101,407,494 shares of Entercom Class A common stock in the merger. In addition, the parties estimate that approximately 3,179,976 shares will be eligible for issuance in respect of equity awards held by employees of CBS Radio in consideration of the replacement of their restricted stock units and stock options in CBS with those of Entercom.
The exchange offer will be subject to proration if the exchange offer is oversubscribed, and the number of shares accepted in the exchange offer may be fewer than the number of shares tendered.
Shareholders of CBS Class A common stock may also participate in the exchange offer by converting or condit
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Combination of CBS Radio and Entercom Will Create Scale and Reach across the U.S., Including 22 of the Top 25 Markets 
