STANDARD RADIO DELAYS TRUST IPO Gary Norris – Canadian Press Standard Radio Inc., one of Canada's biggest radio operators, has called off its planned issue of income trust units, blaming "recent market conditions."
The Toronto-based owner of 51 radio stations in five provinces did not say Thursday when it might try again to market the Standard Radio Income Fund IPO. But it said it has not withdrawn the preliminary prospectus filed with securities regulators.
Standard Radio - a subsidiary of Standard Broadcasting Corp., the largest privately owned broadcaster in the country, controlled by the family of Allan Slaight - had said May 19 it would set up a publicly traded income fund.
The trust had not been priced but was widely expected to raise as much as $300 million in a spinoff of about one-third of the business.
In announcing the plan last month, Standard president Gary Slaight said it would provide "a solid platform for growth of our core business."
Spokeswoman Trish Moran said Thursday's decision to defer the issue arose exclusively from the recent drop in equity markets, which has cut the benchmark S&P/TSX index down almost nine per cent from its April peak.
The decision is "not really surprising, given how tough the environment has been for trusts," said Westwind Capital Partners analyst Ben Mogil, noting that rising interest rates reduce the allure of income fund distributions.
More broadly, "the whole market has been weak lately; trusts are no exception," Mogil said.
The current market is "not conducive to new issues, or much of anything at all," observed John Kinsey, a portfolio manager at Caldwell Securities Ltd.
"I think if you did have anything like that, you would want to hold it back."
In addition to conventional radio operations, Standard owns the Standard Interactive online entertainment network, content service provider Sound Source Networks, and national radio advertising sales company IMS.
Standard Broadcasting's other assets include two TV stations in British Columbia and part of the Sirius Canada satellite radio service.
According to the preliminary prospectus, Standard Radio generated revenue of $200.3 million in the year to Feb. 28, with net income of $40.1 million and estimated distributable cash of $60 million.
Total assets were valued at $429.1 million, against liabilities of $207.7 million.
Standard, which dates back to the 1927 founding of CFRB in Toronto by radio pioneer Ted Rogers Sr., has undergone a series of corporate permutations over the decades.
These included ownership by the Argus conglomerate and then by Conrad Black's Hollinger group, from which Slaight bought it in 1985, adding to other radio holdings.
Standard claimed 20.1 per cent of commercial radio listening hours this spring, according to Bureau of Broadcast Measurement data.
This was behind 29.7 per cent for the English and French stations of Corus Entertainment Inc., but ahead of Rogers Communications Inc. at 15.3 per cent, Astral Media Inc. with 13 per cent and CHUM Ltd. at 12.1 per cent.
Standard's big-city stations include CFRB, MIX 99.9 and EZ Rock in Toronto; MIX 96, CHOM and CJAD in Montreal; The Bear in Ottawa; HOT 103 and QX 104 in Winnipeg; EZ Rock, The Bear and CFRN in Edmonton; CKMX, CJAY and VIBE in Calgary; and CISL and Z95.3 in Vancouver.
It also has multiple stations in Hamilton, St. Catharines, Pembroke and London, Ont.; two in Brandon, Man.; and 21 in secondary British Columbia centres.
The trustee list of the proposed trust includes Anthony Graham, president of the Galen Weston family's Wittington Investments; pollster Allan Gregg, chairman of The Strategic Counsel; Telus Communications executive Janet Yale; and Dale Lastman, co-chair of the Goodmans LLP law firm. |