Standard Radio Dishes Up IPO

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Postby Glen Livingstone » Sun May 21, 2006 11:22 am

Standard Radio Inc., owner of 51 radio stations and other media assets including two TV stations in B.C., announced plans Friday to spin off approximately one-third of its radio business to a publicly traded income trust.

The amount of money expected to be raised through the trust's initial public offering wasn't announced, but there have been reports that Standard could raise as much as $300 million.

"The creation of the Standard Radio Income Fund provides the company with a solid platform for growth of our core business," Gary Slaight, president and chief executive of Standard Radio, said. Standard Radio also owns an online music and entertainment network.

Its 40-per-cent stake in Sirius Canada, one of two satellite radio providers that began operating last year, is not included in the IPO.

"On average, 6.2 million Canadians spend approximately 60 million hours tuned to Standard Radio's stations each week," the prospectus states.

News of the IPO in April sent radio stocks soaring in Canada amid speculation that other companies might look to follow suit with an income trust conversion.

However, Astral Media Inc. and Corus Entertainment Inc., two large radio players in Canada, both said they are not considering a similar move.

Income trusts pay most of their cash to unit holders and enjoy a favourable tax structure.

With files from The Globe & Mail, Canadian Press and Reuters.
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