Premiere Radio to Get Milken Trust Financing

Premiere Radio Networks Inc. in Sherman Oaks is set to receive $14.8 million in financing from an investment partnership partly owned by a trust set up to benefit the children of former junk bond financier Michael Milken and his brother, Lowell Milken.

Archon Capital Partners L.P. of Los Angeles has agreed to pay $4.025 million for 500,000 shares of Premiere’s common stock and 814,500 warrants to purchase additional stock at $7 a share. If the transaction is completed, Archon would then hold stock and warrants that together would allow it to own up to about 44% of Premiere’s common shares outstanding.

The remaining $10.8-million investment will be made in the form of seven-year debentures carrying an annual interest rate of 9%. The debentures would include 1.08 million warrants exercisable into common stock at $7 a share.

Under the agreement, Premiere’s President and Chief Executive Steve Lehman would remain in his post along with other senior managers, and members of Archon would join Premiere’s board of directors. The management group has agreed to hold at least half their Premiere shares for at least four years. The financing deal is subject to certain conditions, including Premiere receiving shareholder approval.

Premiere produces and syndicates radio programs and services. It said it would use the funds to fuel its growth, create new programming and expand its advertising sales division.