• by Erik Sass  @eriksass1, April 13, 2006

Interep, the nation's largest radio ad sales rep, Wednesday rebuffed a hostile takeover offer, asserting it is not legally obliged to accept the deal even though it represents a significant premium over its plunging stock price. Interep's shares soared as high as 88 cents a share Wednesday following an offer by Oaktree Capital Management to acquire the it for $1.10 a share, but ended the trading day at 68 cent per share. Interep, the nation's largest radio ad sales rep, Wednesday rebuffed a hostile takeover offer, asserting it is not legally obliged to accept the deal even though it represents a significant premium over its plunging stock price. Interep's shares soared as high as 88 cents a share Wednesday following an offer by Oaktree Capital Management to acquire the it for $1.10 a share, but ended the trading day at 68 cent per share.

The takeover play occurs less than a month before Interep is expected to deregister its common stock and officially take itself private after trading for years on the Over The Counter exchange. In February, Chairman-CEO Ralph Guild said Interep was making that move because of its falling stock price, and because of the costs associated with operating a publicly held company, especially those associated with the Sarbanes-Oxley Act.

Last week, Interep said its commission revenues declined 7.2 percent during the fourth quarter of 2005 to $20.8 million, reflecting the loss of major ad sales representation deals: Cumulus Broadcasting and Radio One Inc. For full year 2005, Interep's commission revenues rose 2.1 percent to $80.1 million.

Although Oaktree's offer seems to represent a significant premium over Interep's current market value, the company issued a statement Wednesday saying it was rejecting the offer, adding, "Interep has been confronted by significant issues relating to the terms and conditions of the transaction, many raised by Oaktree itself. Some of these issues have not been resolved." No further clarification was provided.

Based on Wednesday's close, Yahoo Finance estimated that Interep has a market capitalization valued at $7.68 million.

Interep is the nation's largest independent ad sales rep in the radio business, handling spot radio sales for ABC Radio, D&R Radio, CBS Radio and Susquehanna Radio Sales. Interep is operates TV sales rep Azteca America Spot Television Sales and Interep Interactive.