Hispanic Broadcasting Corporation announced that it has entered into an agreement to acquire the broadcast license of an FM radio station broadcasting at 106.5 MHz, serving the Houston market from KQQK, Inc., a subsidiary of Houston-based El Dorado Communications Inc., for $80 million in cash. The Company also granted El Dorado Communications Inc. an option to enter into a time brokerage and acquisition agreement involving the Company's FM radio station broadcasting at 100.7 MHz, also serving the Houston market.
McHenry T. Tichenor Jr., president and CEO of Hispanic Broadcasting Corporation commented, "The acquisition of 106.5 FM will allow us to move one of our successful formats to a technically-superior radio station facility, significantly increasing the number of Hispanics who can reliably receive the signal. Houston is the sixth largest U.S. Hispanic market, and one of the fastest growing major cities in the United States. We are pleased to have the opportunity to enhance our service to our listeners in this important market." The company intends to move one or more of its existing radio formats onto different company-owned radio stations, including 106.5 FM. As a result of these moves, the company expects to experience lower operating performance associated with the format transitions in 2001 and anticipates that after-tax cash flow will be $.01 per share lower in 2001 as a result of these actions.