EXHIBIT 99.1
Investor Contact: Media Contact:
Ken Jones David Reno/Jim Barron/Stephanie Pillersdorf
Liberty Corporation Citigate Sard Verbinnen
864-609-3496 212-687-8080
LIBERTY CORPORATION TO FOCUS ON EMERGING NEW MEDIA,
DIGITAL SPECTRUM AND CORE TELEVISION OPPORTUNITIES AVAILABLE
THROUGH ITS COSMOS BROADCASTING SUBSIDIARY
To Sell Insurance Subsidiaries For Total of $650 Million To Royal Bank Of Canada
Cosmos Signs Letter Of Intent To Merge With Civic Communications
In $204 Million Transaction
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GREENVILLE, SC, June 19, 2000 - The Liberty Corp. (NYSE: LC) today
announced it will exit the insurance business and focus on aggressively
expanding its core broadcasting business and the new media/digital
opportunities associated with broadcasting. Liberty has reached a definitive
agreement to sell its insurance operations to Royal Bank of Canada (TSE, NYSE:
RY) for a total of $650 million, consisting of a dividend from Liberty Life of
up to $70 million and the balance in cash from Royal Bank of Canada. Liberty
also announced it has signed a letter of intent to merge its Cosmos
Broadcasting subsidiary with Jackson, Mississippi based Civic Communications,
under which Liberty will pay Civic $204 million in cash. The Civic transaction
brings the total number of television stations owned by Cosmos to 15 and
positions the combined company to compete effectively in a rapidly
consolidating industry.
Liberty's insurance operations include Liberty Life Insurance Company, a
provider of individual life, accident and health insurance and Liberty
Insurance Services Corporation, one of the nation's largest life insurance
third-party administrators. It is Royal Bank's intention to use the Liberty
insurance operations to expand its presence in the U.S. The transaction is
subject to regulatory approval and other customary conditions and is expected
to close by September 30, 2000.
As part of the merger with Civic, Cosmos will add WLBT-TV, the NBC
affiliate in Jackson, MS, KLTV-TV, the ABC affiliate in Tyler, TX and KTRE-TV,
the satellite affiliate of KLTV in Lufkin, TX. All three stations are rated
number one in local news in their respective markets. The transaction is
subject to regulatory approval and other customary conditions and is expected
to close in the fourth quarter of 2000. Frank Melton, Principal Owner and
President of
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Civic Communications, will join the Liberty Board of Directors, and all current
management of Civic's television stations will continue in their present roles.
Commenting on the transactions, Hayne Hipp, President of Liberty, said,
"The sale of the insurance operations will allow Liberty to focus its capital
and expertise on the emerging Internet, e-commerce, digital spectrum and other
synergistic businesses available through our broadcasting subsidiary. Our
twelve existing network-affiliated stations hold strong positions in growing
markets and generate more revenue and cash flow than their peers in
similar-sized markets. The addition of Civic's three stations, each of which
has superior management and a special relationship with its viewers and
advertisers, will add significantly to our cash flow. In addition, our
transformation into a pure-play broadcasting and new media business will make
it easier for the investment community to evaluate and follow our company."
Hipp continued, "Going forward, Cosmos will enjoy a strong balance sheet.
We plan to opportunistically acquire additional network-affiliated television
stations and will continue to develop supporting businesses, like our cable
advertising sales and direct mail coupon operations. The growth opportunities
in broadcast related new media and digital spectrum businesses are especially
exciting. Our investment in, and operational partnership with WorldNow, an
Internet company which provides media entities with complete solutions for
building Internet businesses, and iBlast, a consortium offering wireless data
distribution through the broadcast spectrum, positions us well on these
emerging platforms. We believe the Cosmos of the future will use multiple
platforms to provide rich local content to its viewers, users and subscribers,
as well as the most efficient reach and demographics to its advertisers."
Hipp concluded, "As a result of the sale of our insurance operations, our
employees and community will continue to benefit from a strengthened company
that will serve as a platform for U.S. expansion by Royal Bank. Royal Bank
shares our concern for people and the communities in which we operate, and we
are confident that they will serve our customers well. The management at both
Liberty Life and LIS posses extensive skills, experience and relationships, and
they will all continue in their present roles."
Liberty expects to realize approximately $500 million in after tax
proceeds from the insurance sale, with the funds to be used to repay existing
debt and fund the Civic transaction. After the completion of the transactions,
Liberty will have, on a pro forma basis, approximately $650 million in assets
with no substantial debt. Reflecting the transactions announced today and the
February, 2000 acquisition of KCBD-TV, pro forma 1999 net revenues were $196
million with earnings before interest, taxes, depreciation and amortization
(EBITDA) of $80 million. Liberty expects to continue to pay its regular
shareholder dividend, which is currently 22 cents
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per quarter on common shares. The broadcasting-focused company will retain a
significant presence in Greenville and employ approximately 1,500 people across
the country.
A major group broadcaster, Liberty's Cosmos subsidiary currently owns
twelve network-affiliated television stations, including seven NBC affiliates
(WALB-TV, Albany, Ga.; KCBD-TV, Lubbock, Tx.; WAVE-TV, Louisville, Ky.; WIS-TV,
Columbia, S.C.; WSFA-TV, Montgomery, Ala.; WFIE-TV, Evansville, Ind.; and
KPLC-TV, Lake Charles, La.); three ABC affiliates (KAIT-TV, Jonesboro, Ark.,
WLOX-TV, Biloxi, Miss., and WWAY-TV, Wilmington, N.C.); and two CBS affiliates
(KGTB-TV, Harlingen, Texas, and WTOL-TV, Toledo, Ohio). Cosmos also owns
CableVantage Inc., a cable advertising sales subsidiary; Take Ten productions,
a video production facility; Broadcast Merchandising Company, a professional
broadcast equipment dealership, and SuperCoups USA, a direct mail coupon
business serving small business owners in markets throughout the Southeast.
About Liberty Corporation
The Liberty Corporation is a holding company with operations in insurance and
broadcasting. Annual revenues in 1999 were $556 million. The company is
headquartered in Greenville, S.C.
About RBC Insurance and Royal Bank of Canada
RBC Insurance is one of Canada's leading insurance providers, bringing travel,
life and health, creditor, home, auto and reinsurance products to more than two
million customers.
Royal Bank of Canada (RY) is a diversified global financial services group and
a leading provider of personal and commercial banking, investment and trust
services, insurance, corporate and investment banking, on-line banking and
transaction-based services including custody. The group's main business units
include Royal Bank, RBC Dominion Securities, Royal Investment Services, RBC
Insurance and Global Integrated Solutions. The group has 49,000 employees who
serve 10 million personal, business and public sector customers in 30
countries. For more information, visit Royal Bank's Web site at
www.royalbank.com.
About Civic Communications
Based in Jackson, Mississippi, Civic Communications owns three leading
television stations: WLBT-TV, the NBC affiliate in Jackson, MS, KLTV-TV, the
ABC affiliate in Tyler, TX and KTRE-TV, the satellite affiliate of KLTV in
Lufkin, TX. All three stations are rated number one in local news in their
respective markets.
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Forward-Looking Statements
The Private Securities Litigation Reform Act of 1995 provides a "safe harbor"
for forward-looking statements. Certain information contained herein or in any
other written or oral statements made by, or on behalf of the Company, is or
may be viewed as forward looking. The words "expect," "believe," "anticipate"
or similar expressions identify forward-looking statements. Although the
Company has used appropriate care in developing any such forward looking
information, forward looking information involves risks and uncertainties that
could significantly impact actual results. These risks and uncertainties
include, but are not limited to, the following: changes in national and local
markets for television advertising; changes in general economic conditions,
including the performance of financial markets and interest rates; competitive,
regulatory, or tax changes that affect the cost of or demand for the Company's
products; and adverse litigation results. The Company undertakes no obligation
to publicly update or revise any forward looking statements, whether as a
result of new information, future developments, or otherwise.
