San Juan Racing Association Inc. announced yesterday that Gulf United Corp. has agreed to acquire the stock of S.J.R. Communications Inc., a San Juan subsidiary that owns 10 radio stations, including WUST-AM and WJMD-FM in Washington.
Once that sale is completed, the company plans to sell its other assets -- including a racetrack in Puerto Rico -- and be dissolved, San Juan's president revealed yesterday.
Under the agreement, a new subsidiary of Gulf will acquire the stock, nine of the stations and other related broadcast assets for a purchase price of $62 million in cash plus the assumption of $5,253 in bank debt. But that price may be adjusted downward by as much as $2 million depending on the prices received for four of the nine stations which Gulf plans to resell.
Among the stations expected to be resold are WUST, said San Juan President H. N. Glickstein. Glickstein announced the agreement with Gulf United President E.G. Fitts.The boards of both corporations approved the agreement yesterday.
Glickstein said that a group of investors has expressed an interest in WUST, a music station aimed at a black audience. Glickstein said he believes the investors are Washington-based, but he declined to identify them. b
The other stations that Gulf will try to sell include WYST-AM in Philadelphia and WKTU-FM and WJIT-AM in New York. If Gulf is unable to resell the stations within 90 days on an acceptable basis, it has the right to terminate the agreement.
Consummation of the plan is conditioned on receipt of appropriate tax rulings and approval of the Federal Communications Commission. Glickstein and Fitts said they hoped the necessary approvals could be obtained to allow the sale to be completed within a year.
The sale also involves the dissolution and liquidation of San Juan Racing, which was approved by San Juan Racing's board at the same meeting. San Juan's other assets, in addition to the stock of the communications subsidiary, are to be sold and the net proceeds distributed to shareholders.
"The principal stockholders have been with this thing for 25 years," said Glickstein. "We feel it's in the best interest of all stockholders to covert paper holdings to cash," he said, noting that the company has not paid a dividend in several years.